By Martha Graybow
NEW YORK (Reuters) - Two former KPMG executives and an outside lawyer were found guilty by a federal jury on Wednesday of multiple counts of selling improper tax shelters that the government said helped wealthy clients evade tax payments.
A fourth defendant was acquitted.
Convicted were former KPMG tax partner Robert Pfaff and former senior tax manager John Larson, and Raymond Ruble, a former partner at law firm Sidley Austin. The federal court jury in New York acquitted former KPMG tax partner David Greenberg.
KPMG
The case has been watched by legal experts as its outcome has been seen as having an impact on the U.S. government's continuing investigations into questionable tax shelters.
The defendants were charged with conspiring to evade taxes for more than 600 clients in a case that was touted as the largest criminal tax prosecution when it started in 2005 with 19 people charged with wrongdoing.
But after charges were dismissed against most of the defendants, the case became much smaller.
The trial began in October. Prosecutors said that between 1996 and 2005, the defendants put together tax shelters known as FLIP, OPIS, BLIPS and SOS that were designed to generate phony tax losses. But defense lawyers argued that their clients acted with good faith in their dealings.
(Reporting by Martha Graybow)
