Terrence Smith, the man accused of defrauding the Bermuda Housing Corporation of $1.3 million, lived a ?champagne lifestyle on a beer economy,? said prosecutor Kulandra Ratneser yesterday.

In his closing speech to the jury, Mr. Ratneser said Smith did not earn enough to support his luxury lifestyle and therefore drained money from BHC funds instead. However, defence lawyer Larry Scott told the seven women and five men who are poised to decide his client?s fate that the Crown?s prime witness ? carpenter Steven Barbosa ? had lied.

Former BHC Property Officer Smith, 45, is accused of defrauding the Corporation between September 2000 and February 2001 by rubber-stamping inflated bills submitted by Mr. Barbosa for payment in the knowledge that they were false. Mr. Barbosa, according to the prosecution, passed $924,668 in profits from this scam back to Smith in the form of cash, plus goods for his home in Tee Street, Devonshire.

Prior to the closing speeches at Supreme Court, Mr. Ratneser completed his cross-examination of defence witness, former BHC General Manager Raymonde Dill. Mr. Dill repeated a point made on Monday ? that he would not have signed off invoices from Mr. Barbosa and cheques to him if he realised false claims were being made.

Mr. Scott then delivered his closing remarks, stating that Mr. Barbosa had ?fabricated? his version of events. He said the bills submitted by the carpenter were not inflated.

?It?s incredulous (to suggest) that everyone at the Housing Corporation was asleep at the wheel.? he said.

Referring to evidence from Mr. Dill that he was on the look-out after rumours of impropriety in Mr. Smith?s department, Mr. Scott pointed out that former Property Manager Tudor Smith painted a picture of his client as ?a scatterbrain?.

Making the point that the alleged fraud is said to have continued despite Mr. Dill being on heightened guard, Mr. Scott said: ?Any sensible person would shut things down for a bit and let things cool off but Mr. Barbosa said the cheques kept coming. Does that make sense to you? The best criminals just don?t work that way. They just don?t do that.? He added that Mr. Barbosa bore a grudge against Smith for causing difficulties in his marriage, having claimed earlier in the case that Smith once revealed an affair he had been having.

In the closing speech for the prosecution, Mr. Ratneser said Mr. Dill proved ?half the case? when he said he would not have signed off Mr. Barbosa?s documents if he had known they were false. He said there was no evidence to suggest the carpenter bore animosity toward Smith.

Mr. Ratneser added the accused man earned just over $64,000 during the period of the alleged fraud, while spending $811,000. Telling the jury that money did not grow on the trees at Tee Street, he said it was BHC cash that Smith spent on luxuries including a home theatre and $195,000 worth of garden landscaping.

Some prosecution witnesses had criticised Mr. Dill?s management of the BHC. One former General Manager, Edward Cowen, said it was inappropriate for him to spend a period from May 2000 until November 2001 filling the vacant Property Manager?s role besides being General Manager. The two roles involved authorising payments made to Mr. Barbosa at different stages in the process of anti-fraud checks.

Describing this as a case of wearing two hats, Mr. Ratneser said: ?The whole of BHC was fooled by a man who knew the system. The system had failed because a man decided to wear two hats. That?s how the fraud was committed.?

He concluded: ?As long as there?s greed people will find ways of using other people?s money for their own benefit.?

Smith denies 45 charges of obtaining property by false pretences. Chief Justice Richard Ground is set to begin summing up the case this morning.