MADRID — Spain’s Supreme Court upheld a prison sentence on Tuesday for Iñaki Urdangarin, the brother-in-law of King Felipe VI, in a fraud case that rocked the monarchy and could send a member of the country’s royal family to prison for the first time in modern history.
The court ruled that Mr. Urdangarin must serve five years and 10 months, five months less than the sentence imposed last year by a regional court on the island of Majorca.
The lower court had found Princess Cristina, Mr. Urdangarin’s wife and the king’s sister, not guilty of criminal charges, but fined her about $312,000 for her involvement in her husband’s businesses. On Tuesday, the Supreme Court cut that amount in half.
The case dates back to 2011, when an investigation was launched into Mr. Urdangarin’s business activities, which mostly involved organizing sports events for regional governments. The probe was initially prompted by huge cost overruns for the construction of a cycling track on Majorca.
It focused on the financing of his nonprofit foundation, the Nóos Institute, on whose board Princess Cristina sat, and a real estate company, Aizoon, which the royal couple co-owned. Eventually, Mr. Urdangarin and his business partners were accused of embezzling more than $7 million.
Mr. Urdangarin was found guilty of several fraud-related charges. On Tuesday, the Supreme Court overturned one of those guilty verdicts, for falsifying documents — and reduced his sentence accordingly — but left the others in effect.
Mr. Urdangarin and his family have in recent years been living in Geneva, where he has been appearing monthly before Swiss authorities, pending a ruling on his appeal in Spain. Mr. Urdangarin still has a final, slim chance of avoiding or delaying incarceration, if he appeals to Spain’s Constitutional Court and that court agrees to reopen the case.
The Supreme Court upheld the imprisonment of Mr. Urdangarin’s main business partner, Diego Torres, but reduced his sentence by almost three years, to five years and eight months. The most prominent politician found guilty in the case, Jaume Matas, the former regional president of the Balearic Islands, will serve three years and eight months in prison.
Felipe became king after the abdication of his father, Juan Carlos, in 2014, by which time Mr. Urdangarin had already been cut off from the royal household. King Felipe then also cut the royal family’s public ties with Cristina, as part of his efforts to fight corruption, increase transparency and improve the tainted image of the monarchy.
The princess was stripped by royal decree of the title of duchess of Palma, but she has kept her succession rights, which put her sixth in line to the throne. She married Mr. Urdangarin, a former Olympic handball player, in 1997.
The trial gripped the nation, and in 2016, it forced Princess Cristina to become the first member of the royal family to appear in court in modern Spanish history. But it is only one of several political corruption scandals involving money embezzled by Spanish politicians and their business partners, most of which surfaced after the bursting of Spain’s construction bubble in 2008.
Earlier this month, another major corruption case helped force a change of government in Madrid. Pedro Sánchez took over as prime minister from Mariano Rajoy after winning a vote of no confidence in Parliament that was prompted by Mr. Rajoy’s party becoming the first political force to be convicted of operating a slush fund.