Sheldon Zelitt, the former chief executive of defunct high-tech firm VisuaLabs, will face a five-week criminal fraud trial next spring but the Crown doubts investors in the company will see any of their-millions of dollars returned.
"It is unlikely that anyone will see anything out of this," prosecutor Jane McClellan said Monday outside of court Monday where Zelitt's lawyer entered a plea of not guilty.
Zelitt, who was extradited from the Czech Republic in May, fled Canada more than two years ago to avoid facing prosecution after trying to pass off a store-bought TV as his own three-dimensional technology.
VisuaLabs once had a market value of about $300-million (Cdn.), but the stock collapsed after directors fired Zelitt upon learning that his inventions were fake.
Crown prosecutors believe investors lost upwards of $100,000 each after being convinced that VisuaLabs' technology was the way of the future.
In 2003, Zelitt was convicted in absentia of 11 counts of misrepresentation under the Alberta Securities Act, sentenced to four years in prison and fined $1.85-million.
Currently serving his sentence for securities violations, Zelitt's criminal fraud trial is slated to begin March 14, 2006 in Alberta provincial court. He did not appear in court Monday.
McClellan said the lengthy trial is necessary because of the complexity of the case and the number of witnesses that will be called.
"The decision was made to extradite Mr. Zelitt because it was our position that the investing public needed to know that the judicial system will deal with Mr. Zelitt and... that he be brought back to answer to these allegations."
Prosecutors are hoping to prove that Zelitt made public and written statements that his new technology existed, when in fact it didn't.
During his 2003 securities violations trial, provincial court Judge Gerald Meagher ruled that a remorseless Zelitt was motivated by greed and made off with $5.7-million.
Zelitt has also been banned from trading securities and acting as a director or officer of a publicly traded firm for 25 years.
Federal and provincial justice officials worked with the securities commission and members of the RCMP's commercial crime unit on Zelitt's extradition.
Zelitt was returned to Canada in May after spending a year in a Czech jail while he fought extradition.
If Zelitt is found guilty of criminal fraud, any credit for his pre-trial custody will be at the discretion of the trial judge. But prosecutors believe his time in a Czech prison is attributable to the extradition process and should not be applied to any sentence he may receive if convicted of the fraud allegations.
"That is our position, that this was time spent at his option, resisting or contesting extradition," said McClellan.