Jurors hearing the case of a $1.3 million fraud allegedly perpetrated by former Bermuda Housing Corporation property manager Terrence Smith, yesterday heard claims that policies and procedures at BHC were not followed.

They were told by a former senior manager at BHC that concerns raised over invoices rubber-stamped by Smith were apparently disregarded by the general manager, Raymonde Dill.

A second BHC manager who once worked under Mr. Dill accused him in court of "upsetting the management process completely" when he took charge.

Prosecutors claim Terrence Smith pocketed more than $600,000 in cash and had $290,000 of work done on his luxury home in Tee Street, Devonshire, after profiting from inflated invoices he instructed carpenter Steven Barbosa to prepare. He faces 46 charges of obtaining property by false pretences between September, 2000 and February, 2002.

Mr. Barbosa was called to the witness box yesterday afternoon by Kulandra Ratneser, Consultant to the Department of Public Prosecutions, to explain the first occasion that he was called upon to submit an overpriced invoice.

He told the court he ran a small one-man firm called Barbosa General Carpentry and Construction and met Smith through a client in 2000.

Smith initially employed him to make cedar doors for his home in Tee Street, Devonshire, paying him a cash deposit of between $5,000 and $10,000.

Next, he claimed, Smith told him that he was a general manager at BHC, and invited him to do all of the carpentry work for the Corporation.

However, he claimed that having accepted this, Smith told him to re-write three invoices that he submitted for work in St. George's, meaning he received an overpayment of more than $11,000 from BHC which he kept for Smith.

Mr. Barbosa claimed to have believed Smith's explanation that he had had to pay this money to other contractors. The prosecution case is that Mr. Barbosa had a total of $1.3 million in cheques paid to him and kept the costs of the work he did and passed the "profits" from all the overpayments to Smith.

He is set to continue with his evidence on Monday morning.

Earlier in the day, the court heard from Tudor Smith, who joined BHC as property manager in early 1994 and left in May, 2000, around three months before Terrence Smith's alleged fraud commenced.

He explained that Smith was one of three property officers whose work he oversaw. The BHC policy at that time, he said, was for all renovation work to be put out to tender after discussions between the property officer and property manager.

Four to six qualified contractors were invited to bid, he said, and the property officer was responsible for checking the work was carried out as it should be by the selected contractor before approving the invoice submitted for payment.

He said he relied on the integrity of the property officers working under him to do this, and believed Terrence Smith followed the procedures. However, he added that he would question the officers and carry out his own occasional checks on the contractors' work.

Tudor Smith said he left the BHC before what defence counsel Larry Scott termed the Corporation's "public difficulties" arose.

Asked his impressions of Terrence Smith were, he replied: "He was very amenable, generous, kind and of the nicest disposition."

But he added: "As a person at work I would say he's interested and capable, but that he's always in a rush and has a relatively short attention span. He's impatient to move on to something else. He might rush things and I might check more carefully the documentation that came through and make sure it was done right."

Tudor Smith told the court he had worked under two general managers ? firstly Ed Cowen, whom he described as "very diligent" and then Raymonde Dill.

He told the court: "I found Terrence Smith fine until the later days ? until Raymonde Dill came along and upset the management process completely."

The Crown also called Jerry Robinson to give evidence. Mr. Robinson became property manager at BHC in November, 2001, taking over from Raymonde Dill who had held this responsibility in addition to the general manager's role since Tudor Smith's departure. He left the Corporation in April, 2002.

Mr. Robinson explained that, by this time, it was the property officers who negotiated with the contractors.

He spoke of signing-off invoices claiming large sums of money in the belief that Terrence Smith had already rubber-stamped these "in good faith".

One two occasions Mr. Robinson said he had raised concerns with Mr. Dill about the amount of money being claimed on the invoices. When Mr. Dill cleared these by signing them, he then put his signature to them too.

"I didn't have a choice to argue with the boss," he told the court.

Under cross-examination from Larry Scott, he said that he had been "brought up to speed" on how to go about the property manager's job by Raymonde Dill.

He confirmed that he had not seen the BHC's policy and procedures manual until he was made Acting General Manager in January 2002.

He told the jury he had believed BHC was getting "value for money" from its contractors until taking on this role, but that his opinion changed at this point.

"When I became Acting General Manager it opened up my eyes to lots of things ? job descriptions of everyone at BHC (and) procedures and policies that were not followed," he said.

The BHC saga came to light in March, 2002.

Following an internal investigation, Smith, Mr. Dill and finance manager Robert Clifford were suspended.

Smith denies all of the charges against him, and the case continues.