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Han Tak Lee, 80, a native of South Korea who earned U.S. citizenship, was exonerated and freed last year after a judge concluded the case against him was based on since-discredited scientific theories about arson. Prosecutors appealed, saying that other evidence pointed to his guilt.
The Philadelphia-based 3rd U.S. Circuit Court of Appeals rejected the appeal, meaning Lee will stay out of prison.
The New York City shop owner had taken his 20-year-old, mentally ill daughter to a religious retreat in Pennsylvania's Pocono Mountains where, prosecutors say, he set fire to their cabin. Lee has long contended the 1989 fire was accidental.
Lee, who returned to Queens after his release from prison, did not answer his phone Wednesday. He told The Associated Press in an interview last month that he still loved America and "I expect America to make the right decision."
His attorney, Peter Goldberger, called on prosecutors to let the ruling stand.
"I hope, now, that they will finally see there is no basis for this conviction," Goldberger said. "They can say it's nobody's fault, that science changed, that this is over now, and the federal court has had the last word."
Monroe County District Attorney David Christine, who prosecuted Lee in 1990 and whose office lost the appeal, did not immediately return a text and email seeking comment.
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