Former oil tycoon Mikhail Khodorkovsky and his business partner Platon Lebedev were declared guilty of fraud by the Moscow's Khamovniki court on Monday. Both men were accused of embezzling 218 tons of oil via their oil company Yukos and laundering over $97.5 million (3 billion rubles) in revenues.

The 47-year-old Khodorkovsky was due to be released mid next year, but a sentence in the second trial could send him back to prison till 2017. Judge Victor Danilkin, in his verdict, stated that both businessmen headed an organized crime group and resorted to financial misdemeanors in Russia's oil business.

Russian news agencies quoted the judge as saying, the court has established that Khodorkovsky and Lebedev have appropriated property using their staff positions.

Both men have pleaded innocence since the beginning of the trial and maintained that the allegations against them were part of a political feud. They have already spent more than seven years in jail so far. Despite the verdict, the prosecutors are likely to slap the third set of charges against the duo in the coming months.

Meanwhile, in US embassy cables sent out to Washington from Moscow, American diplomats maintained that charges against Khodorkovsky were politically motivated and were in fact orchestrated by Kremlin.

Khodorkovsky would likely remain in prison as long as Putin administration is in power, the cable dated April 2007 said.

Russian Prime Minister Valdimir Putin, when asked about Khodorkovsky trial in the recent question-and-answer session, he said, a thief belongs in prison.