July 7, 2006

Judge orders Berlusconi to stand trial in fraud case

By Emilio Parodi

MILAN (Reuters) - A judge on Friday ordered Italy's former
Prime Minister Silvio Berlusconi to stand trial over alleged
fraud at his family's broadcaster Mediaset.

Preliminary hearings began in October after a four year
investigation by Milan magistrates into claims of embezzlement,
false accounting, tax fraud and money laundering in television
rights deals between 1994 and 1999.

Berlusconi has denied any wrongdoing.

The judge also ordered that 13 other people, including
British lawyer David Mills, the husband of a British government
minister, should also be tried over the alleged fraud at
Mediaset, judicial and legal sources said.

"It was a predictable decision, considering the previous
hearings in Milan," said Berlusconi's lawyer Niccolo Ghedini.

"They haven't allowed crucial witnesses for the defense to
be heard," he added.

The sources said the trial would start on November 21.

Prosecutors suspect a U.S. firm sold television and cinema
rights to two offshore firms controlled by a Berlusconi family
holding, Fininvest.

The offshore firms then allegedly inflated the prices and
sold them to Mediaset, controlled by Fininvest, to avoid
Italian taxes and create a slush fund.

In a related case, Milan prosecutors have accused
Berlusconi of paying Mills, the estranged husband of British
Culture Secretary Tessa Jowell, a kickback of $600,000 for not
revealing details of his media empire when Mills testified in
two court cases. Mills has also denied wrongdoing.

The most serious alleged crime in the main Mediaset case is
money laundering, which carries a possible sentence of four to
12 years. For Berlusconi, the most serious accusation is tax
fraud, which carries a sentence of up to six years.

Shares in Mediaset fell 1.7 percent to 8.9 euros at 1527

Berlusconi, who lost elections against centre-left rival
Romano Prodi in April, has been tried on at least seven
occasions for graft. He was found guilty four times, but
verdicts have been overturned on appeal or the statute of
limitations has applied and he no longer had to face trial.