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Future Electronics Inc. declared victory yesterday after the U.S. Department of Justice dropped its marathon investigation into allegations that it had defrauded technology companies of $100-million (U.S.).

Robert Miller, the media-shy Montreal millionaire who is the majority owner of Future, is "happy that it's over and disappointed that this was ever allowed to happen," said Robert Vaupshas, vice-president of sales at Future, one of the world's biggest distributors of electronic components.

"We maintained our innocence throughout this thing and told our customers and suppliers that, eventually, these allegations will go away and that's what happened," Mr. Vaupshas said.

On a related legal issue, Canadian federal and provincial authorities said they will seek to continue their appeal of a Quebec court decision overturning a search warrant that allowed a massive 1999 police raid at Future headquarters in Montreal on behalf of the U.S. Federal Bureau of Investigation. They said the decision raises important legal issues about cross-border co-operation.

In a terse, two-sentence letter to a Future lawyer in Dallas dated March 15, Mike Uhl, assistant U.S. attorney for the northern district of Texas, says his office "has declined prosecution of the matter." No reason is given.

The International Assistance Group of the federal Department of Justice in Ottawa was also advised of the withdrawal of a request for assistance under a treaty of mutual legal assistance in criminal matters between Canada and the United States.

"The case is over against Future," said Mitchell Weinberg, vice-president and general counsel at Future.

Kathy Colvin, a spokeswoman in the U.S. attorney's office in Dallas, declined to comment on the reasons for dropping the case.

"We don't discuss that," she said.

Future had been under investigation by the FBI, which alleged that the company defrauded Texas Instruments Inc., Motorola Inc. and other companies of $100-million over four years.

In its application for the search warrant, the FBI alleged that two sets of books were kept in order to take advantage of supplier-rebate programs. The search warrant was used in the May, 1999, seizure of 85 boxes of files and disk drives from Future's head office in the Montreal suburb of Pointe Claire.

As Future fought the seizure, on grounds that Canadian police authorities seized the documents based only on U.S. allegations that had not been ascertained by a Canadian court, the material was sealed.

In December, 2000, a unanimous decision by the Quebec Court of Appeal quashed the search warrant and ordered the return of the seized materials to Future within 30 days.

The three judges said the affidavit accompanying the search warrant, by RCMP Sgt. Gérard Bossé, was insufficient because it was based only on unsworn, secondhand information from FBI Special Agent James Kendall, who based his allegations on interviews with three former Future employees.

But federal and provincial Crown lawyers sought to appeal the decision in the Supreme Court of Canada.

That appeal will continue because it concerns major issues regarding the ability of police forces from different countries to collaborate on cross-border cases, said Daniel Grégoire, a Crown attorney in Quebec City.

"Requests for assistance are similar in nature to the thinking behind extradition treaties," he said.

A ruling from the Supreme Court would help clarify the matter in the context of increasingly global commercial crime that calls for police forces from different countries to work closely together, he said.

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