As Terrence Smith faced the prospect of eight years behind bars yesterday, news emerged that his Tee Street home will be auctioned off.

The Department of Public Prosecutions has launched an action under the Proceeds of Crime Act to confiscate Smith's profits from the fraud, including the home furnished through the stolen cash.

Chief Justice Richard Ground said yesterday that it was decided last Friday that Capital G bank ? which provided the mortgage to Smith and his wife for the house ? had priority when it came to recovering its money.

He said the bank had "a secured interest" in the property, but that the DPP "want what's left".

However, he postponed the progress of the Proceeds of Crime case until July 14, after Crown Counsel Paula Tyndale said more information must be gathered on how much of the $1.2 million involved in the fraud ended up benefiting Smith.

Justin Williams, lawyer for Capital G, referred to costs having been awarded against the Crown during yesterday's hearing, which was held in the Chief Justice's chambers.

Speaking afterwards, he told the reason for this was that the DPP had contested Capital G's priority interest in the house.

However, the result was that an order was made in favour of the bank. Mr. Williams said: "Capital G will now sell the house. It will go through a public auction to obtain the highest market value."

He said the bank would be entitled to the mortgage amount, and interest, and the Crown would be entitled to what was due to it once this had been agreed during the Proceeds of Crime Act hearings.

Also speaking afterwards, Consultant to the DPP Kulandra Ratneser said: "Capital G has a charge on the property and they get priority unless the Crown can prove that they had some kind of knowledge of what was done. "The Crown conceded the other day that that's not the case. Capital G will get back what they initially loaned him."

During the trial earlier this year, the court heard how Smith made false claims to be an architect at the Corporation and also gave inflated salary figures when applying for Capital G loans totalling $840,000 for Tee Street.

In evidence, Capital G mortgage officer Andrea Proctor confirmed that the bank did not verify this information before granting the loans.

Former BHC General Manager Edwin Cowen said in his evidence that the home was worth "close to $1 million" in the year 2000.

After what he believed was $700,000 to $900,000 worth of work on the property, he estimated its value at $2.35 million by 2002.