Judge Daiva Pranytė-Zalieckienė said that Uspaskich, the founder and long-time leader of the Labor Party, was not only aware of the fraud but also coordinated the unlawful operations.
"In 2004-2006, the Labor Party constantly received income that was not officially included in the books," the judge said. According to the statement, the party concealed its actual sponsors.
The court said that guilt of the party's former accountant Marina Liutkevičienė was also established.
The panel of judges said the Labor Party, which is currently a member of the ruling coalition, unlawfully avoided paying more than 3.8 million litas (EUR 1.1m) in required taxes and fees in the 2004-2006 period.
According to the verdict, financing of the Labor Party from informal sources enabled it to gain increased popularity and secure more votes in parliamentary elections.
MP Viktor Uspaskich, founder of the Labor Party, was found guilty of fraud and fraudulent bookkeeping and sentenced to four years in prison.
The court also ruled that MP Vitalija Vonžutaitė, named by the court as Uspaskich's right hand, should spend three years behind the bars, the party's former accountant Marina Liutkevičienė was sentenced to one year in prison and the Labor Part's incumbent leader Vytautas Gapšys received a fine of 35,700 litas (EUR 10,270).
Uspaskich played "the leading role" in the 2004-2006 crimes, Judge Daiva Pranytė-Zalieckienė said issuing the ruling.
The court believes that the role of Gapšys, who took over the held of the party following its reorganization, was not a leading one.
The party as a legal entity avoided prosecution, since following reorganization and a merger with the daughter Laborist Party, a new legal entity was formed.
A pre-trial investigation into alleged financial crimes of the Labor Party was launched back in May 2006. Uspaskich was named a suspect in the case but fled to Russia in the fall of the same year and asked for political asylum.
He returned to Lithuania later the same year, however.
The case reached court in April. 2008.
Between the first and second round of voting in the Seimas elections on October 26, a prosecutor asked for part of charges to be amended for the defendants to stand trial not for fraudulent bookkeeping but for fraud.
Party will appeal
Leaders of the Labor Party say they plan to appeal against their conviction and add that the case should not affect the ruling coalition.
"It's too harsh a punishment. I hope that people of the highest instance, higher qualification, who are not afraid of political pressure, will make a different decision," the party's founder Viktor Uspaskich commented after the ruling.
The party's incumbent leader Gapšys said he had no plans to resign as a deputy speaker of the Seimas.
"I believe that the coalition can continue working the way it started working. All coalition partners knew about this legal situation," Gapšys told journalists.
Lithuanian President Dalia Grybauskaitė on Friday refused to comment on the court ruling in the Labor Party's fraudulent bookkeeping case.
"The president does not comment on court rulings," the Press Service of the President told BNS.
Meanwhile Social Democratic Prime Minister Algirdas Butkevičius says he expects that the coalition will be able to continue working successfully.
"I'm not a judge. I can't comment on the court's decision," he told reporters.
The prime minister has added that he believes that the judgment will have no impact on the work of the coalition.
"I think that the coalition will continue to work successfully," he said.
Butkevičius would not say if he thinks that Gapšys can stay in his post of the speaker of the Seimas.
"Let's put this issue aside for now," he said.