The jury now will decide whether Malvo, 18, should be sentenced to death or life in prison without parole. A jury in nearby Virginia Beach convicted Muhammad last month and recommended that he be executed for his role in the killings.
Malvo, whose expressions had often been animated throughout the trial, had little reaction when the verdict was read, reports CBS News Correspondent Stacy Case.
Malvo was convicted of two counts of capital murder in the Oct. 14, 2002, killing of FBI analyst Linda Franklin outside a Home Depot in Falls Church, Va. One count alleges multiple murders in a three-year period; the second alleges Franklin's death was intended to terrorize the public. Malvo and Muhammad, 42, are the first two people tried under the post-Sept. 11 terrorism law.
Only one victim's family member spoke publicly after the verdict was announced, the brother of Dean Myers victim number seven out of ten. Who was shot at a Virginia gas station, reports CBS News Correspondent Sharyl Attkisson.
"We are extremely pleased with the verdict, believe that justice has been served and we appreciate the opportunity now to move into the sentencing phase," said Bob Myers.
Prosecutors portrayed Malvo as a gleeful and eager triggerman in the October 2002 killing spree, saying he fired shots from the trunk of a beat-up Chevy while Muhammad plotted the attacks.
Ten people were killed and three were wounded during the spree — most them as they went about their daily routines. A 13-year-old boy was wounded after being dropped off at school. A mother was gunned down as she vacuumed her minivan at gas station. One victim was mowing grass when he was killed. Another was buying groceries.
Authorities say the killings were part of an attempt to extort $10 million from the government.
During his closing argument, prosecutor Robert F. Horan Jr. called Malvo and Muhammad "peas in a pod," motivated by greed and meanness.
"Their belief, as wild and vicious as it was, was that if they killed enough people, the government would come around" and meet their demand for $10 million, Horan said.
During the six-week trial, jurors saw several grisly crime scene photos and heard two police confessions in which a cocky Malvo gloated about the killings. "I intended to kill them all," he said on one tape.
In a separate conversation with a detective, Malvo chuckled as he recalled how one victim, James L. "Sonny" Buchanan, fell after being struck, while the lawnmower he had been pushing rumbled along.
He bragged that he and Muhammad could pull off a shooting regardless of police presence. "You don't mean nothing," he told Detective June Boyle. "We will shoot with you there. We shoot with you not there. We will shoot with soldiers there."
The defense contended that the confession was fabricated by Malvo to protect Muhammad, the man he had come to view as a father. The defense said Muhammad brainwashed Malvo and left him with a mental illness called a dissociative disorder, disrupting Malvo's own identity and leaving him unable to tell right from wrong.
In closing arguments, defense lawyer Michael Arif said Malvo, desperate for a father figure, found the wrong man to emulate and eventually became "a cult of one" with Muhammad as his leader.
"Lee could no more separate himself from John Muhammad than you could separate from your shadow on a sunny day," Arif said. "He was not the idea man. He was a puppet, molded like a piece of clay by John Muhammad."
The jury could have convicted Malvo of first-degree murder, which would have taken the death penalty off the table. The decision to convict on capital murder means that the jury believes Malvo was the triggerman in Franklin's death. It also means that they jury believes the killing was an act of terrorism.
Malvo, in his initial confession to police, had claimed to be the triggerman in all the D.C. sniper shootings, but subsequently recanted and said Muhammad was the shooter in all but the final shooting.
Defense lawyers called several experts to bolster the insanity defense, including an expert on child soldiers who testified how youngsters with unstable family lives are vulnerable to brainwashing. A cult expert made a similar point.
Although Malvo's mother often dropped out of his life as a child, the teenager's father testified that he had a "loving" relationship with his son and described him as "manageable" and obedient.
Leslie Malvo cried as he recounted how he taught Lee to ride a bicycle and play catch and would buy him ice cream almost every night. The defendant laughed as his father described how the ice cream dripped down the 3-year-old Lee's hand and arm.
Despite the convictions, Malvo and Muhammad could stand trial again. Prosecutors in Maryland and Louisiana have said they want a crack at Muhammad, and Malvo could face a similar fate.
Virginia is one of only 21 states that allow the execution of 16- and 17-year-olds. Malvo was 17 at the time of last year's sniper spree, and Attorney General John Ashcroft cited Virginia's ability to impose "the ultimate sanction" as his basis for sending Malvo and Muhammad to Virginia for prosecution.
The state is one of only six that has actually executed a juvenile since the death penalty was reinstated in 1976, according to the Death Penalty Information Center.
Muhammad was convicted of identical charges for the killing of Dean Harold Meyers at a gas station. The judge could reduce his punishment to life in prison when he sentences Muhammad in February, although Virginia judges rarely overrule a jury's recommendation of death.