Chanel is Under Investigation for Tax Evasion In Turkey

Is tax evasion hot this season? The latest slew of fashion houses in hot water with the Feds would have us think so. First it was Prada and Dolce and Gabbana, and now Chanel is under investigation for not paying customs taxes in Turkey. In other words, our beloved Chanel may have smuggled goods into the country. Is nothing sacred anymore?

According to Turkish news sources, the luxury mega-brand is "facing charges of 'systematic smuggling' for its operations in Turkey, on accusations of importing goods without customs declarations." The French fashion house is accused of evading the required customs tax by smuggling wares across the border in suitcases carried by Chanel employees to then be sold in Chanel stores located in Istanbul.

A potentially damning piece of documentation from the Customs Directorate was sent to the chief public prosecutor in Bakırköy, a district of Istanbul. The document claims that some items from two Chanel stores in high-street shopping districts were brought into the country illegally. There is also evidence of an email correspondence between employees in Istanbul and the Chanel headquarters in Paris, in which one of the suspects "asks her colleague in Paris how to register the goods that were free of duty payments."

Things are not looking so great for the two Chanel employees under investigation, who each face up to 10 years in prison. According to Fashionista, the brand has officially confirmed that an investigation is underway, but expressed surprise at the "number of accusations in the media.” Chanel further stated that in 2012 an internal investigation found suspicious irregularities in the management of the Turkish boutiques. The managers were subsequently fired.

At least this seems to be a localized issue for now, although the correspondence with Chanel's Paris offices might cause the investigation to trickle beyond the employees in Turkey. Let's hope that our favorite purveyor of tweed is innocent! There is no need for a brand of such caliber, with financial resources to spare, to be so underhanded. Time will tell whether we can happily continue to purchase quilted handbags guilt-free.