Italian ex-premier Berlusconi found guilty of tax fraud

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MILAN -- Just two days after announcing that he won't run in spring elections, former Italian Premier Silvio Berlusconi was convicted of tax fraud and sentenced to four years in prison Friday in a verdict that could see him barred from public office for five years.

Berlusconi, after dominating Italian politics for nearly two decades, has seen his power weakening in the last year as a sex scandal tarnished his image, and he was forced to resign as premier after failing to convince financial markets that he could produce convincing reforms to shield Italy from Europe's debt woes.

In the latest blow, the 76-year-old billionaire media mogul received the stiffest sentence among four co-defendants convicted in a scheme that involved inflating the price his media empire paid for TV rights to U.S. movies and pocketing the difference. And the sentence was more than the three years and eight months sought by prosecutors.

The court, which began hearing the case in 2006, also said Berlusconi could not hold public office for five years or manage any company for three years -- penalties that would be enforced only if the conviction is upheld at two levels of appeal.

In a statement, Berlusconi's lawyers condemned the verdict as "absolutely incredible," and said they would appeal. He is expected to remain free while the two levels of appeal are exhausted.

A corruption bill drafted by the technical government headed by Premier Mario Monti, who replaced Berlusconi, would bar anyone convicted at trial level from seeking office.

Berlusconi denounced his conviction as "unreal," and the case as politically motivated -- as he has the numerous charges against him, mostly for business dealings, since he entered political life in 1994. Berlusconi stayed away from the Milan tribunal, where his lawyers were defending him Friday in a separate courtroom on charges of that he paid for sex with an underage Moroccan teen and then tried to cover it up.

"It is a political conviction that I can define perfectly well as incredible and intolerable," Berlusconi said in a phone call to his Italia 1 private network Friday evening. He denied that there was any connection between the conviction and his decision this week to step aside and let another center-right candidate seek the premiership in spring elections. "My lawyers and I never thought that such a conviction would be possible," Berlusconi said.

The court read its reasons for the conviction immediately in court -- a rare occurrence, given that they have 90 days to write them. It was a sign that the judges want to speed the case along to the appellate level before the charges expire, sometime next year or early 2014.

Berlusconi has been convicted in the past at the trial level. But the convictions have always either been overturned on appeal or seen the statute of limitations run out.

The real impact this time will be in whether the provision barring from office those convicted at trial level will make it through Parliament in the corruption bill. "It is something to monitor," said Roberto D'Alimonte, a political science professor at Rome's LUISS University.

Prosecutors allege that the defendants were behind a scheme to purchase rights to broadcast U.S. movies on Berlusconi's private television network and falsely declared the payments to avoid taxes. They said the defendants then inflated the price for the TV rights of some 3,000 films as they relicensed them internally to Berlusconi's networks, pocketing the difference amounting to around 250 million euros.

A total of 11 people were on trial. Three were acquitted, including a close Berlusconi associate, Mediaset Chairman Fedele Confalonieri. Berlusconi and three others were convicted, including Hollywood producer Frank Agrama, who received a three-year sentence. The four convicted must deposit a total of 10 million euros ($13 million) into a court-ordered fund while the appeals proceed.

Four defendants were cleared because the statute of limitations had run out on their charge.

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