Mr. Dolce and Mr. Gabbana are hardly the first designers to fall foul of the Italian tax authorities, and a list of allegedly fiscally errant designers reads like the roster at Milan fashion week. In some cases, the infractions, which have varied in severity, have been settled with the payment of a fine. In others, the charges have been thrown out.

What sets this case apart is that the designers stand accused of fraud. Papers filed by prosecutors in a Milan court allege a “criminal design” to defraud the state.

The inquiry was begun by the Guardia di Finanza, the Italian police force specialized in fiscal crimes, which is affiliated with the finance ministry. The unit investigated the 2004 sale of the Dolce & Gabbana and D&G brands to Gado, a holding company based in Luxembourg, which was in turn owned by a company that belonged to the group headed by the designers.

Prosecutors contend that the Italian revenue service was duped out of taxes on the sale of the brands, which they claim were sold well below market value, and on the income from royalties, which were taxed in Luxembourg at a much lower rate than they would have been in Italy. The brands were sold for €360 million, or $508 million — an amount that investigators say was just under a third of their actual value, according to their own calculations.

On the one hand, the Italian revenue agency is seeking to recover unpaid taxes and to impose fines. Separately, prosecutors are seeking a criminal indictment for setting up what they consider a dummy company. They accuse Mr. Dolce and Mr. Gabbana of fraud and fiscal irregularities for failing to pay taxes on undeclared income of €416 million each. The petition also asks that charges be brought against three company executives and a tax advisor.