By Jonathan Stempel

NEW YORK (Reuters) - A New York lawyer has been criminally charged with failing to report to the Internal Revenue Service more than $3 million of fee income from tax shelter and other transactions he handled at the law firm Herrick Feinstein, where he led the tax practice.

According to an indictment made public on Wednesday, Harold Levine diverted the money from Herrick Feinstein with the help of Ronald Katz, a certified public accountant who hid from the IRS more than $1.2 million he received for his involvement.

The scheme began in 2004 and lasted roughly a decade, and included the use of limited liability companies controlled by Levine, Katz or both, according to the indictment.

Levine, 58, was charged with eight counts including tax evasion, wire fraud, making false statements to the IRS, obstruction and conspiracy, according to the indictment and prosecutors.

"It is our intention to fight these charges and we're confident that Harold will be fully exonerated," Marc Mukasey, a lawyer for Levine, said in an email.

Katz, 59, was charged with obstruction and conspiracy.

His lawyer, James Froccaro, in a phone interview said Katz "maintains his innocence."

In June 2014, the government filed a civil lawsuit accusing Levine of cheating the IRS out of more than $129 million by participating in roughly 90 illegal tax schemes, resulting in hundreds of millions of dollars of improper deductions.

That case was put on hold in July 2015.

Levine left Herrick Feinstein in 2012 to take over the tax practice of another law firm, Moritt Hock & Hamroff. That firm's website no longer lists him as a partner. A spokeswoman for the firm did not immediately respond to requests for comment.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio)