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Report: Italian castle seized in tax probe involving sale of Hugo Boss

MILAN, Italy – Police in Italy have seized assets worth $83.5 million - including a 15th century castle - in a tax probe involving the sale of fashion houses Hugo Boss and Valentino in 2007, according to reports.

Italy's tax police said on Monday they had confiscated real estate, land and corporate holdings of 13 people "linked to one of Italy's most important families in the fashion and textile sector."

A person familiar with the investigation told Reuters the 13 people in question were linked to the Marzotto group, and included members of the Marzotto family.

Marzotto sold Valentino Fashion Group - then including both the Valentino label and Hugo Boss - to private finance group Permira in 2007 in a deal worth $6.8 billion. Those under investigation are suspected of not having filed tax returns.

The Financial Times of London reported that the seized assets included apartments in Milan and Rome, a 25-room villa in Alpine resort Cortina d’Ampezzo and land. It said a 50-room castle, Villa Trissino Marzotto, near the town of Vicenza, was also seized.

'Totally groundless'
The Italian government has set fighting chronic tax evasion as one of its priorities as it seeks to come to grips with the country's towering debt crisis and find resources to fund growth.

Lawyers representing the Marzotto family said the decision taken by Milan prosecutors ordering the seizure was "totally groundless".

The lawyers said bank documents showed capital gains from the operation had been declared and taxed.

"I acknowledge the seizure measures. I think it right only to point out that I did not have any operative position in the company in which I was minority partner," Matteo Marzotto, a board member of the textile family group, said in a statement.

The technocrat government of Prime Minister Mario Monti has described the fight against tax evasion as a state of war and has stepped up monitoring and collection efforts.

Damir Sagolj / Reuters

Italy's Prime Minister Mario Monti arrives for a session at the Asia-Europe Meeting summit in Vientiane, Laos, on Monday.

Earlier this year the head of Italy's Inland Revenue service, Attilio Befera, said tax evasion totaled about $150 billion.

A spokesperson for the Marzotto Group declined to comment, saying the news did not involve the company or any of its units.

Police said in a statement the probe revealed that a Luxembourg-based holding company used by the Marzotto Group in the sale made a capital gain of nearly 200 million euros, resulting in tax evasion of 65 million euros.

"The investigation... revealed that a financial holding company purposefully created in Luxembourg was instead administered from Italy," the police said.

Reuters contributed to this report.

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