A key witness in the $1.3 million fraud case against former Bermuda Housing Corporation worker Terrence Smith has claimed Smith?s alleged illegal practices were well-known within the Corporation.

Carpenter Steven Barbosa ? who says he helped the former Property Officer siphon off money from the Corporation ? was asked by defence lawyer Larry Scott why he put his reputation on the line to do so. He replied: ?He (Smith) told me that everybody in the office knew what was going on.?

However, when Mr. Scott asked if he had improper dealings with BHC General Manager Raymonde Dill or anyone else, Mr. Barbosa answered that he had not.

The self-employed carpenter met Smith in August 2000 and agreed to work on his mansion on Tee Street in Devonshire, as well as the BHC?s housing stock.

He has spent four days in the witness box at Supreme Court explaining how he repeatedly submitted ?overpriced? invoices to the BHC on the instructions of Smith, 45.

The Crown says Smith took advantage of his position of responsibility at the Corporation by rubber-stamping these requests for payment in the knowledge that they were false.

Mr. Barbosa claims to have passed the profits from his over-charging practice back to Smith in the form of cash, plus expensive goods and services for the Tee Street home.

The 46 charges of obtaining money by false pretences that Smith faces allege he induced the BHC to pay Mr. Barbosa more than $1.3 million, of which Smith is said to have profited by $924,668 with the carpenter retaining $428,043 as the costs of his jobs.

Yesterday, answering questions from Consultant to the Department of Public Prosecutions Kulandra Ratneser, Mr. Barbosa told the court about a fountain costing more than $10,000 he once bought for Smith?s home with BHC money.

?It had a big sculpture of a dolphin in the middle and smaller dolphins around the outside,? said the carpenter, explaining that he arrived at the house one day to find the new fountain had been dug up.

When he asked Smith why, he replied: ?It was taking up too much room and there was not enough room to put chairs and tables around the pool.?

The carpenter also claimed Smith told him that the fountain was his to throw away and he should mind his own business.

Mr. Barbosa said that around the time of his last job for the BHC, in February 2002, he was told by Smith that BHC General Manager Raymonde Dill had highlighted some double-billed work.

Mr. Barbosa, having identified two instances where he had indeed charged the BHC twice for the same job, claimed to have told Smith he could not afford to pay back the $21,900 he owed the Corporation.

He said that Smith then instructed him to prepare an invoice for $22,300 which represented carpentry work he had already been paid for at Tee Street plus money that Smith ? a tenant of his ? owed him for electricity. Smith subsequently handed him a Capital G cheque for this amount and Mr. Barbosa prepared a bank draft to repay the BHC.

The carpenter said he stopped working for Smith at Tee Street in August or September 2002 as no money was coming in from the job.

Under cross-examination by Larry Scott about his personal life, Mr. Barbosa drew gasps of surprise from the jury when he claimed his first marriage had ended in divorce in October 2003 because he found out his wife was already married to another man. He later married her sister-in-law.

He confirmed that his first wife, Anne-Marie Barbosa (formerly Cruz) once took an overdose after accusing him of an affair with her sister-in-law Gerlie Cruz, but Terrence Smith raced her to the hospital where she was revived.

Both women come from the Philippines and Mr. Barbosa told the jury that Anne-Marie took funds from his bank account over the years and sent them to the Philippines but that this was not ?thaat great a figure?.

An internal investigation at the BHC took place after allegations came to light in March 2002 and Finance Manager Robert Clifford, General Manager Raymonde Dill and Smith were suspended.

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