The Bank of Butterfield's investigation into the work of a senior loan officer was based on "a rush to judgment'' that once begun "got out of hand'' a defence lawyer suggested yesterday.

And after they had the banker arrested, they hired a team of lawyers to protect their interests instead of simply asking the banker to explain himself.

Lawyer Julian Hall who is defending former Bank of Butterfield senior manager David Alexander Diggins, made these charges yesterday during his cross examination of executive vice president for group banking Colin Furr.

At issue is whether Diggins falsified the information contained in a loan application.

He arranged a loan for 1,875,000 pounds for a Gibraltar based company called Neway Properties Ltd. and they used that money to purchase a property in London's west end called the Moulin Complex. Diggins was then a senior manager responsible for all foreign and international loans at the Bank of Butterfield.

The Crown alleges that he did not follow proper procedures and that money was advanced improperly.

However Mr. Furr, who oversaw the entire investigation into Diggins' involvement in the Neway Properties loan, admitted that the money had been fully repaid, and that the bank had realised a net profit of 65,188 pounds.

At the beginning of his Supreme Court trial, Diggins was charged with stealing $2,812,500 and obtaining the money under false pretences and with intent to defraud, inducing Mary Faries to deliver the money to Neway Property Ltd.

without proper authorisation on August 29, 1995.

But those charges were dropped when Solicitor General Barrie Meade issued a Nolle Prosequi which meant that he was no longer prepared to proceed on either the stealing or the obtaining money by false pretences charges as they first appeared on the indictment.

Diggins now stands accused of fraudulent false accounting. It is alleged that on August 25, 1995 he falsified a report and its supporting documents.

Secondly, it is alleged that he obtained a valuable security by false pretences on August 28 and with intent to defraud caused Mary Faries to send $2,812,500 (1,504,991.93 pounds) to the National Westminister Bank in London.

Pusine Judge Richard Ground is presiding.