Berlusconi tax fraud conviction upheld in Milan appeals court

The 20-year-long judicial confrontation between former prime minister Silvio Berlusconi and Milan magistrates registered another potentially explosive moment yesterday when an appeals court upheld a four-year prison sentence for tax fraud, handed down last October.

Yesterday’s ruling concerned a complex, 10-year investigation into the purchase of TV rights on behalf of Mr Berlusconi’s Mediaset TV company, during the years 2001 and 2003. State prosecutors argue that Mr Berlusconi was the mentor behind a scheme where films were bought from major US studios through a series of offshore companies. These were then sold to Mediaset in Italy at inflated prices, evading taxation and creating a $40m slush fund.

Mr Berlusconi says the accusations are ridiculous, given the relatively small amount of tax fraud and also because at the time of the alleged offences, he was serving as Italy’s prime minister.

If yesterday’s verdict is confirmed at the third and final level of judgment in the Court of Cassation, probably next autumn, then Italy could be facing a serious political crisis given that the sentence also bans Mr Berlusconi from public office for at least three years.

In the meantime, this latest move seems certain to cause further serious strains within the PD-PDL coalition government.