updated 4/14/2005 9:30:52 PM ET 2005-04-15T01:30:52

A Canadian court has declined to give sanctuary to China's most-wanted man, Lai Changxing, although the ruling appeared to leave open the possibility for further appeals.

Chinese authorities claim Lai is the mastermind behind a network based in Xiamen, responsible for smuggling as much as $10 billion worth of goods into the country with protection from corrupt officials.

Chinese leaders say Lai was the mastermind of the biggest smuggling case since the founding of the communist state in 1949.

Lai, his wife Tsang Mingna, and their three children arrived in Canada with his family in August 1999 after fleeing China by way of Hong Kong.

Fearing execution if they were returned to China, Lai and his family members applied for refugee status in Canada.

Chinese President Hu Jintao had sent then-Prime Minister Jean Chretien a diplomatic note with assurances the alleged smuggling kingpin would not be executed if returned to China.

Intrigues of ‘Red House’
Lai has not been convicted of any offenses and claims innocence, but the communist officials say he plied officials with prostitutes and booze in a specially built seven-story mansion, which has been dubbed the Red House.

Exhibitions and television shows have detailed his alleged crimes and excesses.

In a decision released in June 2002, the Immigration and Refugee Board found Lai and Tsang were "not credible and that there were serious reasons for considering Lai had committed the crimes of smuggling and bribery."

Lai's attorneys argued the refugee board had made errors on questions surrounding the specifics of alleged criminal acts, the nature of political persecution in China, whether Lai would be executed if convicted in China, and argued that evidence against the family was obtained through torture.

Judges back up board’s earlier decision
The three-judge panel on Thursday countered that the refugee board had acted correctly and denied the application to have its decision overturned.

"The board made no legal error in determining that there were serious reasons for considering (Lai and Tsang) were involved in alleged activities without coming to a conclusion with respect to specific acts," the court concluded.

Lai's Canadian lawyer, David Matas, told The Associated Press that Lai will take the case to the Supreme Court of Canada within 60 days. "There are still several recourses available to him," Matas said.

Matas has maintained that Lai continues to fear execution despite Beijing's assurances to Canada, which forbids capital punishment.

The Federal Court said it would allow a pre-removal risk assessment.

"The question of torture and diplomatic assurances can be fully canvassed along with any new evidence that may become available," the judges said, apparently leaving the case open for further appeals.

Matas told the court Chinese officials had lied several years ago on visa applications to get to Canada to meet Lai. Further, he argued that much of the evidence against Lai appears to have been coerced through torture.

Matas noted that eight people connected to the case have already been executed in China. Several people, including Tsang's mother, have been jailed for sending Lai funds for his defense, he said.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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