Former Thunder Bay mayor Keith Hobbs has been found not guilty of extortion.

Ontario Superior Court Justice Fletcher Dawson handed down his decision at the Thunder Bay Courthouse on Thursday, following a three-week trial, which started in Nov. 2019. Hobbs's wife, Marisa Hobbs, and city resident Mary Voss were also acquitted.

The trio had been accused of attempting to use the threat of criminal allegations to induce the alleged extortion victim, whose identity is covered by a publication ban, to purchase a house for Voss.

Defence lawyer Brian Greenspan, who represented Keith and Marisa Hobbs, said the couple were confident this day would come.

"The allegations were always allegations they denied," Greenspan said, speaking to reporters outside the courthouse on behalf of his clients.

"There was a great deal of press and attention paid to those allegations that harmed them in many ways in the public and in the community. Those allegations have been demonstrated not to have been truthful or accurate."

Dawson had prepared a 155-page decision, taking about two hours to read nearly 60 pages before ultimately arriving at his verdict.

He said he was not satisfied the case against the accused had been proven beyond a reasonable doubt.

Dawson said the written agreement, drafted by Keith Hobbs but signed by the unnamed person and Voss, which had been the centrepiece of the allegations, did not imply any threat to not disclose information to police.

The Crown was trying to "pound a square peg into a round hole," the judge said.

During the trial, Crown prosecutor Peter Keen portrayed Keith Hobbs as the one "driving the bus," and leading the alleged extortion attempt.

But the judge said he believed it was the unnamed person who was truly driving the bus, finding the person to be "thoroughly unreliable" and "generally of bad character." Dawson said he also found reliability issues with testimony from two other Crown witnesses, Heli Kijanen and Craig Loverin.

Hobbs, who is a retired Thunder Bay police officer, served two terms as mayor of the northwestern Ontario city from 2010 until deciding not to seek re-election in 2018. Ontario Provincial Police charged the Hobbs couple and Voss in July 2017, after a lengthy investigation.

Outside court, Greenspan described it as a "tunnel-visioned" investigation that focused on the wrong issues.

The court heard evidence during the trial that the couple had significant financial issues, and Dawson said they initially contacted the complainant to try to "curry favour," and had "stars in their eyes" over a potential $2-million settlement.

The trial also heard evidence that Hobbs worked as a security consultant while serving as mayor, and the investigation led to a search warrant being issued to seize the computer in his city hall office.

Dawson said some elements of the Crown's case, including a late night meeting between Keith Hobbs and Loverin in a grocery store parking lot, were not as significant as had been presented during the trial.

It was "not part of an extortion scheme," the judge said.

Dawson said caution needed to be used when assessing Keith Hobbs's testimony, noting he found some exaggeration from both Hobbs and his wife to make themselves appear in the best light. But he said he believed they went to police when Voss was willing, and added Keith Hobbs facilitated police interviews.

The Crown had conceded during the trial that a not guilty finding for the Hobbs couple should also result in an acquittal for Voss.

Greenspan said the Hobbs couple is hoping to return to normalcy. George Joseph, the defence lawyer representing Voss, said she is looking forward to moving on to the next chapter of her life.

The Hobbs couple had also originally been charged with one count each of obstructing justice, but those counts were withdrawn by the Crown following a preliminary hearing.