After years of court cases, legal argument and allegations, the law finally caught up Silvio Berlusconi today when he was convicted in a criminal court and sentenced to four years in prison – later cut to one year – after prosecutors proved the billionaire ex-premier was guilty of a multi-million euro tax fraud. He has said he will appeal.

The Milan court declared the mogul guilty of dodging huge amounts of tax by exaggerating the cost of film rights that he purchased for his Mediaset television empire. Some of the assets were diverted to overseas slush funds in Switzerland and Hong Kong in the €200m scam.

Despite the media mogul having been mired in scandal after scandal for the best part of 20 years, today’s conviction is his first; other criminal trials have ended in acquittal or have been thrown out under the statute of limitations. Still, Berlusconi, 76, is unlikely to go to jail despite the sentence; under Italian sentencing guidelines, convicts over 70 are rarely incarcerated.

Another three defendants were convicted, including a Hollywood producer, Frank Agrama, who received a three-year sentence. Three other defendants including the Berlusconi confidante Fedele Confalonieri were acquitted. Four defendants were cleared because the statute of limitations kicked in.

Angelino Alfano, the secretary of Berlusconi’s PDL (People of Freedom) party said the verdict was “incomprehensible” and said he was confident an appeals court would throw out the conviction. Berlusconi’s lawyers, Niccolo Ghedini and Piero Longo, called the verdict “absolutely incredible” and “lacking legal logic”.

Even some neutral observers had voiced doubt that the tax-fraud charges against Berlusconi would stick, seeing as they cited decades-old accounting trails, at a time when the tycoon was already more involved in politics than broadcasting.

But the prosecutor Fabio de Pasquale said Berlusconi was at “the top of the chain of command in the sector of television rights” when Mediaset inflated film costs by around €285m from 1994 to 1998, and by €30m from 2001 to 2003. The prosecution said Mediaset executives inflated the price for the TV rights of some 3,000 films as they re-licensed them internally to Berlusconi’s networks, pocketing the difference.

The court also ordered the disgraced tycoon and 10 co-defendants to pay €10m to Italian tax authorities.

Berlusconi is almost certain to use both the appeals he is entitled to under Italian law. But the sentence caps a dreadful week for the three-time premier.

The tax-fraud verdict came a day after Berlusconi announced that he would not stand as the centre-right candidate in next year’s general elections. He decided to step aside “for the love of Italy” he claimed. Pundits said the poll ratings and the disintegrating state of his PDL party meant he had no choice. The Milan court banned Mr Berlusconi from holding public office for three years, although this sentence might not be imposed before the appeals process is completed.

It was widely believed the mogul was keen to hold high office again in order to gain some protection from the criminal charges he has faced.

As well the tax-fraud conviction, Berlusconi’s humiliation at the hands of his nemeses, the magistrates, continued today in another court room in Milan’s Palace of Justice, where the mogul is accused of paying for sex with an underage prostitute – Karima “Ruby” el-Mahroug – and abusing his office to cover up the act.

There appeared to be bad news for Berlusconi when the Hollywood star George Clooney failed to appear today to assert in the mogul’s defence that the notorious soirées in Arcore were not sordid sex parties with hookers but “refined and elegant dinners”. There is no evidence that Clooney attended the parties and the actor expressed surprise at the assertion he would be called to give evidence.

Most observers believed the celebrities had been named as stalling mechanism by the defence. The chief prosecutor Ilda Boccassini suggested as much. “In this way the trial is held up,” she said.

One witness, called by the defence, Giorgio Puricelli, a member of Lombardy Regional Council, admitted he saw the notorious statue of Priapus that Berlusconi liked to have centre stage during his soirees.

“Yes, I saw it,” he said “it was a fun statuette. They told me that it came from Africa, but I do not remember sex scenes with the statue.”

Last week Berlusconi told the trial that there had “never been scenes of a sexual nature” at his Arcore mansion – just months after other witnesses told judges that strippers in nun costumes were paid to fondle guests and remove each other’s underwear. This case continues.

Berlusconi is currently staying at the Kenyan ranch of his tycoon friend Flavio Briatore.

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

"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 yesterday evening.



He denied that there was any connection between his decision to step aside and allow another center-right candidate to seek the premiership in spring elections.



"My lawyers and I never thought that such a conviction would be possible," Berlusconi said.

One Prime Minister: 18 years facing Italian justice

1994

Media and construction tycoon Silvio Berlusconi wins his first general election. Sworn in as prime minister in March, by November he is under investigation for corruption.

1997

Sentenced to 16 months jail for false accounting and 33 months for bribing financial police. Acquitted on appeal.

1998

Sentenced to 28 months in jail for financing of Italian Socialist Party. Case dropped. Guilty of bribing judge but “timed out” under limitations statute

2002

Under Berlusconi, Italian parliament relaxes laws on false accounting.

2008

Berlusconi’s cabinet provides him with temporary immunity from prosecution. Move to make this permanent ruled out in 2009.

2009

Accused of attending the 18th birthday party of model Noemi Letizia. Wife files for divorce.

2010

Nightclub dancer Karima El Mahroug, aged 17, held by police on charges of theft, released by Italian police after a call from Berlusconi.

2011

Indicted on charges of paying for sex with El Mahroug and abusing his power by seeking her release from custody in 2009. In November, he steps down as premier.

2012