cash-strapped Bank of Bermuda officer arranged to buy a $500,000 house, a court heard yesterday.

Calvin Shabazz, who was later charged with theft from the bank, told a detective he pinned his hopes on selling the Cable Hill, Devonshire property and paying all his debts.

But the market turned and his plans failed, he told the officer.

Shabazz, 53, denies stealing $121,000 from the bank while a respected assistant manager.

Fraud detective DC Peter Morgan told the court the $310,000 was loaned to Shabazz for specific purposes, including paying off a $141,000 mortgage on his then home, Cosie-Ville in Smith's.

But only $20,000 of it was paid on the mortgage, the court heard. More than two years later the bank asked Shabazz to resign and called in the Police.

Pamela Johnson, then a secretary at L.P. Gutteridge, told the court Shabazz came in on July 26, 1988, the day he got the $310,000 loan, and paid $20,000 off his mortgage.

She added LPG got a call that month about paying off the mortgage, possibly from Shabazz. The firm had decided not to stick to its normal three months notice and to allow the mortgage to be paid off immediately.

Dc Morgan said he interviewed Shabazz in April and May of 1991.

The former bank official told him it was "absolute nonsense'' that he had stolen loan money.

Shabazz said he went into LPG to pay them off but was told they needed 30 days notice, said Dc Morgan.

"I was advised you can't just pay it off like that, you have to give notice,'' Shabbaz told him. "I had planned to just march up the street with a cheque.

"The situation just got neglected,'' Dc Morgan said Shabazz told him. "I never got authorisation from LPG to pay it off in full. I didn't really pursue it. I didn't have time to.'' He had put the Devonshire house up for sale with the intention of selling it and paying off "everything''.

But he had problems selling the house, and in the meantime separated from his wife, he said.

Shabazz still owes the bank $446,000, the court has heard. The trial continues today.