Lawyers clashed yesterday over the validity of warrants issued to detectives to search the offices of law firm Appleby Spurling and Kempe (ASK) and two other addresses during a fraud inquiry.

Police searched two ASK offices as well that of Sterling Management and the home of tennis player Norberto Herrero last year during an investigation into claims a trust was used as a “front” to cheat Government out of $660,000 land sale tax.

Former Mayor of Hamilton William Boyle sold the $3 million home, La Paloma in Harbour Road, Paget, to a trust in 2002.

But Supreme Court heard Police believe the Labrador Trust was a “front” to allow the home to be passed to non-Bermudian Mr. Herrero and his wife Kathleen and thus avoid $660,000 in sales tax.

The court has heard Police suspect the Herreros, Mr. Boyle, ASK lawyer Scott Swainson, and Bruce and Margaret Hern of Sterling Management, who are trustees of the Labrador Trust, were involved in a conspiracy between April 1995 and April 2003 to defraud Government of $660,000. No one has been charged, however.

ASK and the six named individuals are trying to get Supreme Court Judge Ian Kawaley to quash the search warrants.

Mr. Kawaley said he could not understand how a crime could have been committed because, as the trust was legally set up, Government should not be owed anything from the sale of the house.

“It is difficult to see what offence was actually committed in the sense of the fundamentals of how you can conspire to defraud Government of something to which Government is not entitled,” he said.

“Government, I am sure, would like a licence fee for all properties where a non-Bermudian has an interest, but are they entitled?

“Parliament could enact legislation for anyone by any device, whether it be a trust, who derives a benefit in a property, to pay a licence fee. In the absence of that, how can you conspire to defraud Government what was not due to Government?”

Delroy Duncan, lawyer for the six people under investigation, said Mr. Herrero “denied categorically” a claim from Police that he paid $100,000 for Mr. Boyle to “front” for him.

Police information put before Magistrate Edward King to secure the search warrants stated Mr. Herrero had told a Government land valuation officer he had paid the sum to Mr. Boyle to front for him.

Mr. Kawaley said: “One thing that strikes me as rather odd is that Mr. Herrero told the land valuation officer that he paid a fronting fee.

“At first blush, the idea of paying a fronting fee seems a shocking allegation, but if it was reported to a Government official it doesn't seem to be obviously consistent with dishonesty.”

David Kessaram for ASK said Police were obliged to give a “full and frank disclosure” to a Magistrate when applying for a search warrant.

“Bermuda's land laws are not straightforward, and if you overlay that with immigration, you get into a very difficult area,” said Mr. Kessaram.

“It was incumbent on the Police officer to satisfy himself that these facts constituted an offence and to make disclosure of his opinion of the law.

“It would not be reasonable for the Magistrate to rely purely on the opinion of a Police officer and he would expect the Police officer to say ‘this is difficult but I have taken some advice from a lawyer and been advised that this is the case'.”

Solicitor General Wilhelm Bourne, appearing for Mr. King, said statute did not require an officer to disclose all the legal issues and difficulties when applying for a warrant.

“In an investigation, you are not going to have full details to put to a Magistrate. The Police officer is putting before the Magistrate the information he has in support of a complaint,” said Mr. Bourne.

“You have to have an allegation, which if proved, would amount to an offence, but at that early stage you are trying to get information to prove an offence.”

Legal precedent showed an officer had to have a “responsible and sincere belief” that an offence had been committed when he made an application for a warrant.

Acting Director of Public Prosecutions Kulandra Ratneser for the Police, said officers satisfied all that was required when they sought the warrants, because they had specified what the alleged offence was, when it was said to have occurred, the basis of the suspicion, and what they thought seized documents might tell them.

“If you look at the information provided for the Magistrate, there are several conspiracies, or several unlawful objects set to be achieved by the conspirators in this case,” said Mr. Ratneser.

“The Crown's case is that the man at the centre of this whole conspiracy is Mr. Herrero. At different stages different people joined for the purpose of achieving different objects, that is why it is necessary to lay before the Magistrate all the information available to the Police.”

Sade Subair also appears for the Police. The hearing is set to continue today.