Bail was denied to one of the former KPMG partners charged by the federal government in connection with the sale of allegedly fraudulent tax shelters.

Called a flight risk by federal prosecutors, David Greenberg was the only defendant to be arrested by authorities. Greenberg has also been accused of falsifying documents to hide his involvement in questionable shelter deals, coaching a co-conspirator to lie to investigators, and misleading investigators about whether he had surrendered all his passports. If convicted, Greenberg could face more than 25 years in prison.

U.S. District Judge Lewis A. Kaplan said that he believed that Greenberg, 46, had expressed an intention to flee in the event of an indictment and would have financed his flight with assets he placed in accounts created under his ex-wife's and father's names. While Greenberg's lawyer disputed the allegations, Kaplan pointed to Greenberg's 2004 formation of a limited liability company that now holds more than $11 million and that his ex-wife said she discovered only through a mass mailing.

In October, a New York federal grand jury charged 19 defendants in the case with at least 39 counts of tax evasion and a single count of conspiracy to defraud the Internal Revenue Service. Earlier, KPMG agreed to pay $456 million to avoid prosecution over its sale of abusive tax shelters. Investigators have said that the shelters may have cost the government more than $2.5 billion in tax revenue.

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