A former lawyer was among three of the four remaining defendants in the KPMG tax shelter case convicted Wednesday by a Manhattan federal jury.

Raymond Ruble, who once was a partner at Brown & Wood, was convicted on 10 counts of tax evasion while investment consultants Robert Pfaff and John Larson were convicted on 12 counts.

Each defendant faces five years on each count when they are sentenced March 20 by Southern District of New York Judge Lewis A. Kaplan. The hundreds of millions of dollars the government claimed was lost in tax revenue from the bogus shelters is expected to factor into Kaplan’s calculation on appropriate sentences.

David Greenberg, an ex-KPMG partner, was acquitted Wednesday on all counts.

Greenberg, who was jailed for more than five months following his arrest, wore a look of relief as he offered brief words of consolation to his co-defendants. He then left the courtroom ahead of his lawyers, Richard Strassberg and David B. Pitofsky of Goodwin Procter.

“David Greenberg was innocent, he is innocent and the jury found that to be the case,” Strassberg said. “We’ve had three years of horrible injustice against Mr. Greenberg.”

The trial began on Oct. 13 and the jury deliberated for a full week, weighing a large volume of evidence in a complex case, before reaching its decision.

Kaplan ordered Pfaff and Larson to home confinement and electronic monitoring while they await sentencing. Ruble remains free on bail.

All three men were acquitted of a conspiracy to defraud the Internal Revenue Service as well as a single count on one kind of tax shelter. Ruble was acquitted on two counts involving one tax shelter.

The guilty verdicts brought a measure of vindication for the Southern District of New York U.S. Attorney’s Office, which had seen most of the defendants in what was billed as the largest tax fraud prosecution in U.S. history dismissed by Kaplan last year on interference with the right to counsel.

Prosecutors John Hillebrecht and Margaret Garnett succeeded in persuading the jury that the tax shelter known as BLIPS had no legitimate business justification.

A scheme that was motivated by “greed,” Hillebrecht told the jury, worked this way: Larson and Pfaff, formerly of KPMG, marketed the tax shelter to KPMG clients, and Ruble provided hundreds of opinion letters to the clients saying the shelters were more than likely to hold up in court if challenged by the IRS. Ruble received $50,000 per letter.

The BLIPS tax shelter was, on the surface, a seven-year “investment” that was tied to the unlikely event that foreign currencies would be depegged from the U.S. dollar. In reality, all of the wealthy clients who made an investment in what Hillebrecht called a “magic tax elimination machine” ended their transactions in 60 days and acquired a huge paper loss to offset millions in capital gains.

A key to Greenberg’s defense was the cross-examination of California accountant Steven Acosta, who was brought forth by the prosecution to show that Greenberg had fraudulent intent in the selling of a tax shelter called SOS.

Acosta was exposed as a liar during cross, a fact that led to a remarkable admission by Hillebrecht during his rebuttal closing argument.

“And let there be no doubt about it, not that I thought that there was any, Steven Acosta was a catastrophe,” Hillebrecht said. “Steve Acosta got destroyed on cross-examination by Mr. Strassberg.”

After telling the jury that “Mr. Strassberg will be telling that story for years,” Hillebrecht said that, while watching Acosta on cross, “I wanted to crawl under the table.”

Acosta also appalled Kaplan, who said afterwards that Greenberg had suffered “an injustice.”

In June, 2006, Kaplan found the government “let its zeal get in the way of its judgment,” and “violated the Constitution it is sworn to defend” by using its leverage to force the accounting firm to stop paying attorney fees for indicted partners and employees.

KPMG, the judge said, was facing extinction unless it cooperated with the government and was willing to bend over backwards and change its legal fee policy, thereby interfering with the right to counsel, and for some, the right to counsel of their choice. The firm escaped with a deferred prosecution agreement, paid a huge fine, and a single charge of conspiracy was dropped against the firm in 2006.

In 2007, Kaplan dismissed charges against 13 defendants, a decision that was upheld four months ago by the 2nd U.S. Circuit Court of Appeals. The circuit agreed with Kaplan that the Sixth Amendment was violated when the government caused “KPMG to place conditions on the advancement of legal fees” and to “cap fees and ultimately end them.”

It endorsed the dismissal of the indictment as the only remedy for the constitutional violation, leaving only Larson, Pfaff, Greenberg and Ruble in the case.

U.S. Attorney Michael Garcia and his staff weighed whether to seek a writ of certiorari from the U.S. Supreme Court, but decided against it and allowed a late-November filing deadline to expire.

Against the remaining defendants, Kaplan whittled the charges down at the close of the government’s case, dismissing the SOS counts against the three men who were ultimately convicted and the BLIPS counts against Greenberg — all for insufficiency of evidence, Strassberg said.

The convicted defendants and their lawyers left the courtroom without comment.

In the final tally for the case, 19 defendants were charged, two pleaded guilty, 13 had charges dismissed, three were convicted at trial and one acquitted.

Ruble is represented by Jack S. Hoffinger and Susan Hoffinger of Hoffinger, Stern & Ross in New York and Stuart Abrams of Frankel & Abrams in New York.

Pfaff is represented by David C. Scheper of Overland Borenstein Scheper & Kim in Los Angeles.

Larson was represented by Thomas A. Hagemann of Gardere Wynne Sewell in Houston.