San Francisco Frontiers - Top Italian influencer suspected of fraud in cake deal

The fashion entrepreneur with 29.5 million followers on Instagram is at the heart of a scandal surrounding her 2022 endorsement of a pandoro cake -- a Christmas treat similar to a panettone -- purportedly to raise funds for children undergoing treatment at a Turin hospital.

Italy's competition watchdog found last month that shoppers were falsely led to believe their purchase of the special edition cake made by Balocco -- which reaped over one million euros for Ferragni's companies -- would contribute to the charity effort.

Ferragni's lawyer, Giuseppe Iannaccone, confirmed Tuesday to AFP that his client had been officially listed by prosecutors in Milan on a register related to the criminal case on suspicion of aggravated fraud.

The procedural step does not imply guilt but indicates enough evidence to place the person under preliminary investigation.

Prosecutors in Milan did not respond to an AFP request seeking confirmation.

"I am not worried because I have always acted in good faith and I am sure that this will emerge from the ongoing investigation," Ferragni, 36, said in a statement.

Last month, the anti-trust authority fined two of Ferragni's companies and Balocco approximately 1.4 million euros ($1.5 million) for implying to consumers that in buying the "Pandoro Pink Christmas", released in November 2022, they would be contributing to charity.

But in fact, Balocco, based south of Turin, had months earlier made a fixed-sum donation of 50,000 euros to the Regina Margherita Hospital.

- 'Communication error' -

Since launching her "The Blonde Salad" blog in 2009, Ferragni has built up a business empire estimated by Forbes as worth $8 million per year, launching her own brand and earning lucrative endorsement contracts for everything from Evian water and Nespresso, to Dior perfume and Louis Vuitton heels.

But the Pandoro scandal, which has made headlines in Italian newspapers for weeks, has been a significant blow to the reputation of the A-lister and her business activities.

La Repubblica reported last week that Coca-Cola shelved a television spot with the star planned for January, while Italian eyewear maker Safilo cut short a licensing deal with Ferragni in December after the watchdog's findings.

Last month, Ferragni posted a near-tearful apology on Instagram, in which she said admitted having committed a "communication error" in linking her charity work with a commercial activity, adding that she would donate one million euros directly to the hospital.

She also said she would challenge the competition watchdog's fine, and were it reduced, she would contribute that sum above and beyond her one million euro donation.

The legal problems of Ferragni may not be over, however, with newspapers reporting that prosecutors have opened a separate investigation into a similar situation, in which the star promoted chocolate Easter eggs, saying their sale would support a children's charity.

Il Fatto Quotidiano reported last month that the candy maker made a 36,000 euro contribution to the charity, while Ferragni was paid 500,000 euros and 700,000 euros in 2021 and 2022 for her promotion.

H.Davis--SFF