TORONTO - An Ontario Superior Court judge has found Sino-Forest Corp.'s co-founder and former CEO Allen Chan guilty of fraud, breach of fiduciary duty and negligence and ordered him to pay more than $2.6 billion.

Justice Michael Penny's decision says that Chan abused his position to orchestrate a large-scale fraud scheme that caused the timber company to lose billions.

Penny ordered Chan to pay $2.63 billion in damages and $5 million in punitive damages in the civil case filed by SFC Litigation Trust, which is acting on behalf of the company's creditors.

Sino-Forest first became embroiled in lawsuits and an Ontario Securities Commission investigation after Muddy Waters LLC released a 2011 report suggesting it was a Ponzi scheme that exaggerates its assets.

A year later it filed for bankruptcy protection, put itself up for sale and delisted from the Toronto Stock Exchange.

In 2017, the OSC found Chan and other Sino-Forest executives defrauded investors, misled investigators and engaged in deceitful and dishonest conduct.