DENVER -- Tim Masters, who was exonerated after spending 10 years in prison and 20 years under an umbrella of suspicion as a defendant, filed a federal lawsuit Tuesday seeking compensation.

Masters' attorney, David Lane, said you couldn't put a price tag on what Masters went through, but did say he could seek as much $50 million in the suit.

The focus of Masters' suit is the testimony of Dr. Reid Meloy, a criminal psychologist from San Diego. He had testified that Masters was criminally capable of the murder, but now claims that he was duped by Fort Collins police and investigators.

Meloy told 7NEWS Tuesday that he was, 'flabbergasted" when he learned of new information that the prosecution never shared with him.

"Dr. Reid Meloy was an essential witness for the state in convicting Tim Masters. He has now told us that his entire testimony was shaped by misleading documents given him by the prosecutors in the case, by the withholding of documents by the prosecutors, he was given incomplete evidence. And had he known the truth, he never would have testified the way he testified," Lane said.

According to the 83-page lawsuit, Masters' attorney alleges that Fort Collins police and prosecutors conspired to fabricate, hide and destroy evidence to make the case that he killed Peggy Hettrick in 1987, when he was 15 years old. Lane said investigators and prosecutors intentionally ignored key evidence and focused on Masters exclusively.

Masters was convicted in 1999 and released from prison in January. His conviction and life sentence were thrown out after sophisticated DNA tests pointed to another suspect. Masters was the first person in Colorado released from prison because of DNA evidence.

An advanced skin-cell analysis on Hettrick's garments found none of Masters' genetic material but identified the DNA of another suspect, a former boyfriend of hers.

Masters has moved to Arizona, where he is working with his uncle in a second-hand restaurant equipment business.

Lane said he hopes that authorites will settle the case before it goes to trial. He said it could save everyone millions of dollars in litigation fees.

Lane said he is certain that a jury would side with Masters.

"The police were acting hand in hand with prosectuors and everyone was involved. Everyone knew the score and everyone he lied," he said.