A key witness in the $1.3 million alleged fraud case against former Bermuda Housing Corporation worker Terrence Smith has recalled once handing him around $40,000 cash in profit.

Carpenter Steven Barbosa claimed that on another occasion the accused man spent $50,000 of the Corporation?s cash on landscaping his luxury home.

Mr. Barbosa said he submitted inflated invoices to the BHC for work done on its housing stock at the behest of Smith, 45. The Crown says that Smith then abused his position at the Corporation by rubber-stamping these payment requests in the knowledge they were false.

The carpenter told Supreme Court yesterday that some of his invoices over-charged for work he had carried out, and others were for jobs that he had not done. He maintained that he passed the ?profits? made through the scam to Smith.

Kulandra Ratneser, Consultant to the Department of Public Prosecutions, has alleged that the BHC was induced by Smith to pay more than $1.3 million of cheques to Mr. Barbosa between September 2000 and February 2002.

He says that Mr. Barbosa retained $428,043 of this as his payment and Smith profited to the tune of $924,668 in the form of cash and goods for his six-bathroom home on Tee Street in Devonshire.

Returning to the witness stand yesterday after beginning his testimony on Friday, Mr. Barbosa explained his version of events surrounding a cheque of almost $100,000 paid out to him by the BHC in December 2000.

He told the court he had done kitchen cabinet work at four apartments in Prospect, Devonshire, for the BHC.

Although he estimated the cost to himself of each separate job at between $4,000 and $5,000, he submitted three invoices billing BHC for almost double these amounts on Smith?s instructions.

A further invoice for $60,000, he said, was for building, plumbing and plastering work that he had not actually carried out. He received a cheque for $99,365 from the BHC as a result of these invoices.

Of this sum he claimed to have paid $33,636 to a construction firm named Borden that had actually carried out the building work.

He withdrew $43,000 cash from his bank account, of which he said he believed he had handed Smith approximately $40,000. He added that $12,000 had been spent on an alarm system for Smith?s home, $6,950 went to a tenant at Tee Street named Hugh Barit, and $4,500 on a new kitchen counter top for the house.

Giving evidence about cash obtained in overpayments from BHC on other occasions, he spoke about how Smith instructed him to pay:

l $23,000 for electrical work at his home;

$5,000 for a fishpond;

and, $7,500 for a gazebo.

Questioned about the administration of his affairs, Mr. Barbosa said his former wife Anne-Marie Barbosa kept notes for him upon his request in an account book, which split the funds between him and Smith.

Later, Gerlie Cruz ? who was Mr. Barbosa?s sister-in-law before she became his new wife ? helped him prepare his invoices.

Mr. Barbosa told the court that Smith became a tenant of his in October 2000, taking up residence at premises he owned in Cambridge Road, Somerset. During his previous stint in the witness box on Friday, he explained he had met the accused man through a client in 2000 and that Smith ? claiming to be the BHC General Manager ? invited him to do all of the carpentry work for the Corporation.

The trial has previously heard how an internal investigation at BHC took place after allegations came to light in March 2002, and that Finance Manager Robert Clifford, General Manager Raymonde Dill, and Smith were suspended.

Smith faces 46 counts of obtaining property by false pretences, all of which he denies. The case, being heard at Supreme Court Three in front of Chief Justice Richard Ground, continues.