A federal district judge in Orlando, FL, dismissed a high-profile case brought by a disgruntled client who charged KPMG had fraudulently convinced him to buy an unsafe income-tax shelter, the Wall Street Journal reported.

KPMG, the nation’s fourth-largest accounting firm, has been under scrutiny over several of its controversial tax shelter products. The company admitted last month that it is the subject of a federal probe "in connection with certain tax strategies," the WSJ reported then.

The complex strategies in question, known by the acronyms FLIP, OPIS and BLIPS, were often sold to wealthy clients looking—in most cases—to offset large capital gains taxes after selling businesses, sources told the Journal.

The attorney for Joseph Jacoboni, the plaintiff in the dismissed case, said he would probably file a new suit in state court alleging many of the same counts against KPMG. U.S. District Judge Anne Conway ruled Thursday that Jacoboni's racketeering claims were barred under federal law, but that he could proceed with other claims in state court, including allegations of fraud and malpractice, Dow Jones reported.

"We are gratified by the court's decision granting our application to dismiss the suit and ordering Mr. Jacoboni to pay our costs," KPMG said in a statement.

Jacoboni’s 2002 suit started the wave of federal investigations and a wave of negative publicity about aggressive tax shelters sold by KPMG and other firms, Dow Jones reported.

The complex strategies in question, known by the acronyms FLIP, OPIS and BLIPS, were often sold to wealthy clients looking—in most cases—to offset large capital gains taxes after selling businesses, sources told the Journal.

KPMG also said it is cooperating and it has stopped selling the three strategies, which brought in $100 million in fees for the firm in the late 1990s, according to a report by a Senate subcommittee investigating tax shelters, the Journal reported last month.