Health Minister Nelson Bascome stole a bank loan intended to start up a business by directing it into his own pockets instead, a prosecutor has alleged.

Bascome, 52, denies any wrongdoing and his lawyer, Charles Richardson, claims that the two theft charges he faces – totalling more than $60,000 – should never have been pressed. Opening the case at Magistrates' Court against the MP yesterday, Senior Crown counsel Paula Tyndale alleged that he stole $40,080.52 entrusted to him by the Bank of Bermuda for business purposes between September 24 2003 and February 19 2004.

She further alleged that he stole $20,000 from the Natural Business Company, of which he was a director, in March 2004.

The first count, she said, relates to an arrangement between Bascome and his business partner, Robert Smith. Bascome, she alleged, "fraudulently converted to his own use" a total of $40,080.52 entrusted to him by the bank.

The money was, she said, intended to meet expenses associated with the start-up of a business by Bascome and Mr. Smith to distribute an invention of Mr. Smith's called the Honae Water Filter and to do other general construction work.

Ms Tyndale claimed that between September 24 2003 and February 19 2004, Bascome received two payments of $50,000 from the bank into one of his personal banking accounts, making up a total loan of $100,000.

However, she alleged that instead of using the funds for this purpose, he instead "converted those funds to his own use and benefit".

The prosecutor went on to say that the entirety of the loan was repaid from a second business start-up loan granted to Bascome and a new company formed by him and Mr. Smith, the Natural Business Company.

At the time of the second charge, that business had already been incorporated. Bascome, she said, was a director of the company and received $20,000 on behalf of it relating to contracts of repair issued by the Government of Bermuda.

"These funds were paid into one of the defendant's accounts and the Crown will seek to prove that the defendant converted these funds to his own benefit, and not to the benefit of the company on whose behalf it had been paid," she said.

Mr. Richardson argued that the charges are "defective" and the funds in question are not capable, as Bermuda's law stands, of being stolen in the way Ms Tyndale alleges.

"This information is so defective on its face that it should be quashed," he urged Senior Magistrate Archibald Warner, who is hearing the case. He questioned who the prosecutor was saying the funds relating to the first count belonged to – pointing to a press statement from the Bank of Bermuda "saying publically it's not complaining of anything".

He went on to tell Mr. Warner that if Ms Tyndale was not saying the funds belonged to Mr. Smith either, then: "They have to belong to somebody. If there's a theft, he can't steal from himself."

Mr. Richardson claimed the bank was "fully aware" Bascome wanted to use some of the loan for the start-up of a company, but there was nothing to say he had to put the funds to this use.

Yesterday, the Bank of Bermuda issued a statement in which it "reconfirms that it never made an allegation of Mr. Bascome stole money from the bank".

The statement concluded: "The bank is not aware of any evidence that would support this allegation and further confirms that it has not suffered any loss."

Mr. Richardson's submissions took up the entirety of the day's court session. Prior to kicking off yesterday, the trial had been adjourned on numerous occasions since Bascome was charged a year ago.

Problems have included the busy diaries of Ms Tyndale and Bascome's legal team, which comprises of Mr. Richardson plus Victoria Pearman.

A drug abuse counsellor by profession, Bascome, of Friswells Road, Pembroke, has been a Progressive Labour Party MP since 1989 for Constituency 16, Pembroke East Central.

He stepped down from his second spell as Health Minister in February 2007 when a file was passed by Police to the Department of Public Prosecutions but was reinstated by Premier Ewart Brown last December.

Last October, Mr. Warner threw out a separate charge of corruption that Bascome faced, ruling that there was insufficient evidence for the MP to stand trial over allegations he corruptly obtained a business opportunity during his period as Health and Family Services Minister in the late 1990s.

After that ruling, Ms Tyndale argued that Mr. Warner should not hear the current theft case because he could be biased against Robert Smith — a key prosecution witness in both cases.

However, Mr. Warner ruled that he is not, and the case continues.