UPDATE 1-Ex-KPMG partner faces new indictment in tax case

(Adds details from indictment)

By Paritosh Bansal

NEW YORK, Nov 15 (Reuters) - U.S. prosecutors have filed a new indictment against a former partner in accounting firm KPMG [KPMG.UL], David Greenberg, who faces trial in a case involving questionable tax shelters, according to court documents.

The development is the latest sign that the government is moving ahead, despite setbacks and delays, with its long-running investigation into questionable tax shelters.

Greenberg is expected to be arraigned on the superseding indictment at a hearing on Friday before U.S. District Judge Lewis Kaplan, according to papers filed in Manhattan federal court. Greenberg, who is in California, is scheduled to appear by telephone.

The new indictment contains fresh allegations against Greenberg, but narrows down the charges against him to one count of conspiracy and nine counts of tax evasion, from one count of conspiracy and 39 counts of tax evasion in one filed in 2005.

It alleges that between 1999 and 2005, Greenberg took part in a scheme with certain co-conspirators to defraud the Internal Revenue Service by designing and selling a tax shelter called SOS, which they claimed could generate losses that would offset the clients' tax obligations.

The shelter transactions led to $400 million in phony losses being deducted on U.S. income tax returns and helped tax payers avoid paying more than $100 million, the indictment alleged.

The co-conspirators, who were not named as defendants in the new indictment, included the accounting firm, a number of its partners and employees, and Greenberg's long-time friend Steven Acosta.