The wife of convicted fraudster Terrence Smith has made a financial bid to save their luxury family home in Devonshire from being repossessed by Capital G bank.

The bank mortgaged the Tee Street property which Smith then renovated with money swindled from the Bermuda Housing Corporation. It is now planning to send in bailiffs to seize the house, and sell it to recover its losses.

Smith was jailed for eight years in May after being convicted of a $1.2 million fraud against the BHC where he worked as a property officer. The trial jury heard how he lived a life of luxury at Tee Street ? which boasts a large pool and home movie theatre ? after reaping the profits from an invoice scam.

Chief Justice Richard Ground subsequently made an order giving Capital G possession of the house in order to recover the mortgage money it had lent Mr. and Mrs. Smith.

He set the sum of $2.5 million as the reserve sale price for the property which, Tunderstands, currently has mortgage arrears topping $1 million.

The Crown has also launched a Proceeds of Crime case in a bid to confiscate Smith?s profits from the fraud. Mr. Justice Ground has ruled that after the sale of the home at auction, Capital G would be entitled to the mortgage amount and interest and the Crown would be entitled to an amount to be decided in future court hearings.

Smith?s defence lawyer Larry Scott has confirmed that Smith?s wife Veronica had submitted a financial proposal which she hopes will safeguard the Tee Street home where she lives with their two children.

Mr. Scott said: ?Mr. Smith can?t do anything because he?s incarcerated and not working but his wife is outside and that?s their family home. What they?re trying to do is save the property. It?s only natural ? she has children and needs some place to live. Capital G has an order for possession but we are trying to make arrangements to do the financing and Capital G are considering our application. They could tell us ?no? because they have a claim higher than anyone else.?

Mr. Scott said that once the criminal proceedings against Smith had begun, the Director of Public Prosecutions instructed Capital G not to have any business dealings with him. This meant that if he had wanted to pay off the mortgage either before or after his trial he would have been unable to do so. It also meant that the mortgage fell into arrears.

Mr. Scott explained that Mrs. Smith hoped to ?regularise? the mortgage by paying off the arrears and then go forward with a regular payment. He would not comment on how she intended to raise the funds, but confirmed that Terrence Smith continues with plans to appeal against his fraud conviction.

During the trial earlier this year, the court heard how Smith made false claims to be an architect at the Corporation and also gave inflated salary figures when applying for Capital G loans totalling $840,000 for Tee Street. In evidence, Capital G mortgage officer Andrea Proctor confirmed that the bank did not verify this information before granting the loans.

Justin Williams, lawyer for Capital G, said yesterday that Mrs. Smith?s lawyer had been in touch and that Capital G would consider any reasonable proposal made in the matter.