Frank Zampino, who was once the right-hand man to former Montreal mayor Gerald Tremblay, has been found not guilty of all charges of breach of trust and fraud in the Contrecoeur scandal.
Paolo Catania and the others accused were also found not guilty on all charges.
Judge Yvan Poulin delivered his verdict Wednesday after spending several hours delivering his analysis of the testimony and pointing out multiple times that the Crown failed to prove its assertions.
“For six years now Mr. Zampino has maintained his innocence in this matter,” his lawyer Isabel Schurman said outside the courtroom Wednesday. “He deplores the delay, but is relived that he had an opportunity to speak and that he was heard.”
Zampino and others were charged with fraud and corruption in connection with a plan to build a housing development known as Faubourg Contrecoeur.
One of the accused, Daniel Gauthier, who was the president of urban design company Groupe Gauthier Biancamano Bolduc., pleaded guilty during the first week of the trial, while another accused, Martial Fillion, has since died.
The scandal began in 2007 when the city of Montreal sold land to Frank Catania's construction firm at a steep discount: just $4.4 million for land others had evaluated at $31 million.
In his ruling, Poulin noted the Crown provided no evidence the sale was not the fair market value, nor was it proven that the estimate of the decontamination costs -- which was used to justify the low price -- was inflated.
“I guess we can say we decontaminated the courtroom,” quipped defence attorney Pierre Morneau.
The sale shocked members of the city's housing group, the Societé d'habitation et de developpement de Montreal (SHDM), which hired an accounting firm to examine the deal.
KPMG determined that the city's then-director general, Martial Fillion, had facilitated payments by the construction firm without the required permission of the administrative council of the Societé.
In his ruling, Poulin seemed to agree with the defence's theory that Fillion gave Catania advances on a $15.8 million loan, and changed the terms of the deal, without any authorization from the SHDM or the knowledge of the other accused.
"There's nothing in the evidence that shows Frank Zampino tried to influence anything," he wrote in his lengthy ruling.
Poulin said that evidence of a conspiracy of a discounted sale in exchange for kickbacks was lacking, and said the low interest rate on the loan was the result of negotiations.
He pointed out that the political donations Catania made to Union Montreal, the politicians that ran the city, were entirely legal at the time.
The judge also noted that financial incentives for development are a frequent municipal tactic.
The Contrecoeur land sale convinced then-Montreal mayor Tremblay to turn the SHDM into a municipal company that no longer operated at arms-length from the city government.
Police then arrested Zampino, Bernard Trepanier (aka Mr. 3 Per Cent), and six others including Paolo Catania in 2012.
Sixty three witnesses testified, with former Ville Marie borough mayor Benoit Labonté stating that corruption and kickbacks were endemic at Montreal City Hall.
Poulin said, however, that one of the Crown's key witnesses, Michel Lalonde, was vague and unconvincing.
Tremblay testified that he was not involved in the development project and left matters entirely in Zampino's hands because "he had all my confidence."
The condominiums that were built on the land were destroyed by a fire in 2009.
Outside the courtroom, the Crown prosecutors said they were disappointed in the ruling, and that they would decide in the next few days if they would appeal the verdict.
“We presented plenty of very complex evidence. The verdict is duly noted, and we'll see if we plan to appeal,” said prosecutor Nicole Martineau.
Schurman said her client was the wrong target all along.
“He sincerely believes today, as he has from day one that he should never have been accused in this matter,” she said.
Zampino has another legal battle ahead of him: he was rearrested last September and was charged again with breach of trust and fraud, this time in connection with the way contracts were awarded when he was still working under the Tremblay administration.
That trial will take place at a later date.