A judge in Toronto on Wednesday ordered a tobacco company and a former chief executive to stand trial on charges of fraud and conspiracy.

JTI-MacDonald Corp., formerly known as RJR-MacDonald, and one-time top executive Edward Lang are alleged to have defrauded Canadian taxpayers of more than $1 billion in taxes and duties. 

A trial date is expected to be set at the end of June.

The judge ruled that there was not enough evidence against six other former executives to commit them to trial, but said the case against Lang and the company should proceed.

Scott Fenton, Lang's lawyer, said his client maintains his innocence.

"My client maintains that he is innocent of any wrongdoing, that he always maintained the highest standards of corporate governance as the chief executive officer of RJR-MacDonald.

"This is a political prosecution, where the Crown has sought to retroactively criminalize the company's involvement in legitimate business transactions involving a legal product that the governments of the day fully authorized," he told CBC News.

The tobacco company said it was "pleased" the court dropped all charges against six of its former execs, and said it would work to clear its name and defend its former CEO.

"We remain confident that a full and fair hearing of the evidence at trial will confirm these allegations to be false," JTI said in a release.

"JTI-Macdonald does not, and never did, condone smuggling or illegal activity," the company said.

Case dates to 1990s

In 2003, investigators accused the firm and eight executives of conspiring to defraud the governments of Canada, Ontario and Quebec out of $1.2 billion in tax revenue between 1991 and 1996.

The company is alleged to have supplied the Canadian black market with Canadian-brand tobacco products manufactured in Canada and Puerto Rico. Police allege the firm provided the cigarettes "knowing that these products were being smuggled back into Canada and onto the commercial market."

Contraband cigarettes allegedly were smuggled from the United States into Canada through native reserves at Cornwall after the federal government doubled tobacco taxes as part of an anti-smoking campaign.

Stan Smith, who was among the eight executives originally charged, pleaded guilty last year in return for co-operative testimony.

Smith, a former vice-president of sales, received a conditional sentence with eight months house arrest after pleading guilty to conspiring to smuggle cigarettes.

Smith had said he oversaw the smuggling scheme, which he alleged was developed by more senior executives.