Germany's Federal Court of Justice in Karlsruhe on Friday confirmed two of the men's sentences of six and seven years. It said the third man's sentence should be reassessed.
The defendants had appealed their 2007 conviction, arguing that the police had breached privacy laws when they bugged the men's homes.
The principal defendant, 32-year-old Syrian-national Ibrahim Mohamed K., had been sentenced to seven years imprisonment for membership in a terrorist organization and attempted fraud in 28 cases.
Yasser Abu S., a Palestinian, received a six-year sentence for the same crimes. His brother, Ismail Abu S., was sentenced to three and a half years in jail for attempted fraud.
The court said it had only been proven that Ismail Abu S. had supported a terrorist organization, not that he had also been a member, and it referred his case back to a lower court for his sentence to be revised.
The men had attempted to raise at least 4.3 million euros ($6.1 million) for the al-Qaeda terrorist network in a massive life insurance scam.
Part of the evidence in the trial was acquired by bugging the men's homes. Though eavesdropping laws were later tightened, the court did admit the evidence gathered was from wire-tapping.
Editor: Nancy Isenson