A British businessman imported novelty golf-ball finders and used the design to develop expensive devices that he claimed could detect explosives and drugs, the Old Bailey has heard.

James McCormick, who worked from a cramped office in Somerset, sold the devices to countries around the world, including Iraq, for as much as $40,000 each, it is alleged.

His publicity material claimed the devices could detect minuscule samples of explosives, class A drugs, ivory and human beings at a distance of up to 1km at ground level and from a plane flying 5km high.

They could even pick up the target substance if it was up to 30 metres underwater or 10 metres underground and a trace of explosive or narcotic weighing a billionth of the weight of a strand of hair could be detected, according to McCormick's material.

But, opening the case, Richard Whittam QC told the jury that the claims were "simply fantastic … incredible". He said: "These devices did not work and he knew they did not work. He had them manufactured so they could be sold for a handsome, unwarranted profit."

Whittam said the devices McCormick is charged over – the ADE 101, ADE 650 and ADE 651 – had been examined by experts who had concluded they lacked "any grounding in science".

The barrister told the jury that in 2005 and 2006 McCormick bought 300 novelty Golfinders from the US. The vendors there emphasised they were "fun" gadgets.

When police were investigating McCormick they got hold of a similar device, a Gopher golf-ball finder costing $18.99, and compared it to a McCormick product called the ADE 100 – a predecessor to the ADE 101.

Whittam said the stipple pattern and even blemishes on the Gopher matched those found on ADE 100s they had seized from McCormick. Whittam said they had come from the same mould.

The jury was told that McCormick had versions of the ADE 100 and ADE 101 made by manufacturers in the UK. He then developed bigger versions that he termed the ADE 650 and 651. In 2007 he told one supplier he had just obtained a "large contract" with the Iraqi government.

The devices comprise a plastic handle fitted with a retractable antenna.

The handle is connected via a wire to a pouch. In the pouch is a card that is said to encode information about the substance to be detected. McCormick claimed the device was powered by static electricity emanating from the user.

Whittam told the jury that McCormick told manufacturers in the UK that he wanted something with a "weighty" handle. The barrister said the device came with an "impressive hard container" designed to "add credibility".

The jury examined publicity material in which the apparent advantages of using McCormick's devices were set out. It claimed that unlike other detectors, the great advantage was that the device did not need to be in physical contact with the target substance.

It said the product could be used at airports, embassies, by the military and government, at nuclear plants, "high-security events" and at police stations and prisons. It claimed it was able to bypass "all known forms of concealment". Explosives that could be detected, according to the publicity material, included TNT and Semtex.

Whittam told the jury that even if it did work as advertised it would not be effective as it would be too sensitive to be of any use. But the barrister said scientists would explain to the jury why they believed it did not work.

McCormick, 56, denies three counts of fraud. The trial continues.