An Italian fashion influencer has been acquitted of aggravated fraud, bringing a long-running scandal involving a charity Christmas cake to an end.

Chiara Ferragni had been accused of misleading consumers by promoting the sale of a designer pink pandoro as well as Easter eggs that were said to be helping to raise money for a children’s hospital and a charity.

After a fast-track trial in Milan, a judge found her and two other defendants not guilty. Had she been convicted, she could have faced a jail term.

Ferragni, 38, told reporters the judgment marked “the end of a nightmare that lasted two years”.

The scandal – dubbed “pandorogate” – started with the sale of pink special edition Christmas cakes in 2022.

Consumers were led to believe that sales of the pandoro would go towards raising funds for a children’s hospital in Turin. But it turned out that the cake’s producer, Balocco, had given a one-off €50,000 (£43,300) donation to the hospital before the cake’s launch.

Ferragni has 28 million followers on Instagram and, after her companies made €1m from the promotion, she pledged to donate the same sum to the hospital.

The outcry led authorities to initiate a formal investigation and the influencer was handed a €1m fine in 2023 by Italy’s competition authority over the pandoro cakes, branded with her name and mentioning the children’s hospital.

Ferragni-branded Easter eggs also became part of the scandal, leading the influencer to agree to pay €1.2m to a children’s charity to settle complaints that the eggs’ sales allegedly misled consumers.

She was later indicted on the aggravated fraud charges, along with business associate Fabio Damato.

Prosecutors had asked for a sentence of one year and eight months in prison for Ferragni but the judge rejected their accusation that the fraud should be seen as aggravated.

The Milan court found that no aggravation had been involved as a consumer group had withdrawn its original complaint. Ferragni had agreed with consumer organisation Codacons that she would compensate consumers and donate money to a charity for women who had suffered gender violence.

“We are all moved,” Ferragni told reporters at the end of the trial. “The last two years have been very hard. I had faith in justice, and justice has been done.”

Despite her acquittal the scandal has proved damaging to Ferragni’s brand and affected her personal life. Her marriage to Italian rapper Fedez fell apart last year.

It has also led to tighter rules for Italian influencers to show greater transparency in their fund-raising initiatives.