Appellate court: Berlusconi ran illegal scheme

By the Associated Press | May 23, 2013 | 3:35 PM EDT

MILAN (AP) — Former Italian Premier Silvio Berlusconi on Thursday called "surreal" the judicial reasoning behind an appellate court's decision to uphold his guilty verdict and four-year jail term in a tax fraud case.

In a nearly 200-page document detailing its reasoning behind the May 8 decision, the court said, "There is conclusive evidence, oral and documented, that Berlusconi directly managed ... an enormous tax evasion through off-shore companies."

Berlusconi was convicted for his role in purchasing the rights to broadcast U.S. movies on his private TV network, then falsely declaring payments to avoid taxes. As part of the scheme, prices were inflated and the difference hidden in offshore accounts.

The judges said that "it was absolutely obvious that the management of rights, the primary cost sustained by the group, was a strategic question and therefore in the interests of the owner, an owner who, in fact, remained interested and involved in the management choices even after abandoning day-to-day management."

It said Berlusconi was one of two people "responsible at the head of this illegal operation."

Berlusconi in a statement called the written judgment "really surreal" and denied ever having an off-shore account "which is indisputable according to documents."

He said all the proceeds from the TV rights remained on the books of third-party companies that marketed them.

Berlusconi's legal team is expected to appeal the verdict to Italy's highest court, with a decision possible by the end of the year.

The tax fraud sentence also carries a five-year ban from holding public office. Berlusconi has no formal role in the current cross-party government, but is a lawmaker and remains influential, for example, persuading the new premier to suspend payments of an unpopular property tax on first homes.

Berlusconi also is being tried in Milan on charges of paying for sex with an under-age teen at the now-infamous "bunga bunga" parties at his villa and trying to cover it up. Prosecutors are seeking a six-year sentence and a lifetime ban from office. A ruling is expected next month.

In another judicial blow, Italy's high court issued its reasoning for refusing to move Berlusconi's trials from Milan to the nearby city of Brescia, saying that prosecutors had only done their job and there was no evidence of persecution. Berlusconi's defense claims that Milan magistrates are biased against him.