Bailiffs have seized convicted fraudster Terrence Smith's luxury home in Tee Street.

A team of removal men and a locksmith descended on the Devonshire property around 10 a.m yesterday at the behest of Capital G bank, which mortgaged the home and moved to repossess it yesterday.

During Smith's trial for his $1.2 million fraud, the jury heard he renovated the house using public cash he had siphoned from the Bermuda Housing Corporation, where he worked as a property officer.

Jurors also heard how Smith made false claims to be an architect at the Corporation and gave inflated salary figures when applying with wife Veronica for Capital G loans totalling $840,000 for Tee Street. Evidence was given that the bank did not verify this information before granting the loans.

The Royal Gazette understands that the Smiths racked up mortgage arrears topping $1 million.

Terrence Smith was jailed for eight years in May, and Chief Justice Richard Ground subsequently made an order giving Capital G possession of the house in order to recover the mortgage money. He set the sum of $2.5 million as the reserve sale price for the property which boasts three bedrooms plus a separate apartment, a swimming pool and a home movie theatre.

The Crown has 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 will be entitled to the mortgage amount and interest and the Crown will be entitled to an amount to be decided in future court hearings.

It was unclear whether Veronica Smith was still living at Tee Street with her two children yesterday, although she was present during the course of the repossession.

Capital G lawyer Justin Williams confirmed that the Writ of Execution issued by the Chief Justice had been executed by the bailiff.

"This involves the bank taking physical possession of the property. To this end the bank's agents are assisting the Smiths and those claiming under them to move their belongings out of the premises and into safe storage," he said.

"It is anticipated that the property will subsequently be placed for sale, with notice, at the highest market value. The proceeds will be used to discharge the mortgage debt due to the bank."

Further court hearings will be held to determine the fate of the balance.

A removals man assisting the Smith family yesterday claimed that a tenant living in the apartment had not been given notice of the action.

"She's away taking her husband to the hospital, and now they have got to move the stuff out today," said the man, who would not give his name.

Mr. Williams said the Smiths needed permission from the bank to take in tenants and this had not been given.

"When we commenced these proceedings we inspected the premises and there were no tenants. The property was vacant, with no furnishings. This morning was the first time Capital G heard of any supposed tenants. I spoke to them and they told me they had no issue with the proceedings," he said, adding that he had no reason to believe that short notice was given by the bailiffs.

Smith family lawyer Larry Scott had previously revealed how Mrs. Smith made a financial bid to save the family home from repossession. An appeal against Smith's conviction is also being planned. He could not be reached for comment yesterday.