Former Mayor of Hamilton William Boyle was accused on Friday of being used as a "mule" to allow a non-Bermudian to acquire a luxury home through a "sham" trust.

The allegation came from Acting Director of Public Prosecutions Kulandra Ratneser during hearings to determine whether search warrants for law firm Appleby Spurling and Kempe (ASK), Sterling Management, and the home of Norberto Herrero should be quashed.

The warrants were issued last summer to detectives investigating claims Mr. Herrero, a non-Bermudian businessman and well-known tennis player, acquired a home in Harbour Road, Paget, from Mr. Boyle through the "sham" Labrador Trust which resulted in the tax-payer being defrauded of $660,000 in land sale tax.

In information presented to a Magistrate to get the search warrants, detectives alleged Mr. Boyle, Mr. Herrero and his wife Kathleen Herrero, ASK lawyer Scott Swainson, and Bruce and Margaret Hern of Sterling Management ? who are trustees of the Labrador Trust ? were involved in a conspiracy between to defraud the tax-payer of the $660,000.

Mr. Ratneser, who represents Police, told Puisne Judge Ian Kawaley that Mr. Herrero financed the purchase of the land and construction of the house, La Paloma, and that Mr. Boyle was a "mule" used to get the property to him.

And he said Police allege Mr. Herrero had told a Government land valuation officer he have Mr. Boyle $100,000 to "front" for him.

Lawyer Delroy Duncan, who appears for the six, said the claim was vehemently denied. No one has been charged in connection with the investigation.

Mr. Ratneser said: "It is unlawful for a restricted person (Mr. Herrero) to acquire land in Bermuda (except if they get a licence) and any conveyance that purports to convey the land to an unauthorised restricted person is unlawful.

"A restricted person, if he attempts to acquire land in Bermuda, does something unlawful. Period. Land can't be transferred except by conveyance. No person will want to enter into a conveyance which transferred land if he is a restricted person.

"We have a restricted person (Mr. Herrero) who is an intelligent man who is aware that it is unlawful to acquire any land.

"What is unlawful (under the Immigration Act) is not only the acquisition of land, but any interest or right over land. That's why any acquisition of interest in land is also unlawful.

"In the knowledge that there is a prohibition to acquire land for permanent occupation and if you enter into an agreement to to circumvent that prohibition or restriction, there is born the conspiracy.

"Mr. Herrero is aware that he can't get land except through the licence which has to be attained at a later stage for property over a certain value.

"First you have to find a Bermudian mule to put his name on the title deeds, and that's what he did.

"A restricted person comes to Bermuda, finds a Bermudian man for $100,000 who is prepared to put his name on the title deeds to enable Mr. Herrero, who uses his own money to develop the land above an ARV level because that is the only way he can apply to Government to get a licence for the land. That is the act of the conspirators."

Mr. Justice Kawaley said as Mr. Herrero was not a beneficiary of the trust, he questioned what benefit he derived.

"The purpose of the agreement was to overcome the restriction of conveying the land directly to Mr. Herrero," said Mr. Ratneser.

Mr. Justice Kawaley countered that he had difficulty trying to find out what offence was committed.

"The offence is the meeting of the two minds (of Mr. Boyle and Mr. Herrero)," said Mr. Ratneser said.

Mr. Kawaley asked: "The way the case was put to the Magistrate involved the necessary assertion that the way of the conspiracy was to defraud the Bermuda Government, depriving the Bermuda Government of the licence money."

But Mr. Ratneser replied: "That's only one part. If two people agree to defeat the purpose of a law, that is an offence. Land is a precious commodity in Bermuda. Bermudian land for Bermudian people is extremely important.

"Mr. Herrero was party to the conveyancing of the property. The combination of these two persons is a dishonest combination. Therefore it is a conspiracy to defraud."

Mr. Ratneser also pointed out that in 1998 when Mr. Herrero tried to buy the house from Mr. Boyle, he valued it at $2,040,000, but Government rejected this, saying the true value of the property was $3 million.

Four years later, the property is sold to the trust ? which Police say mean it went to Mr. Herrero ? for $2.8 million.

"I wasn't in Bermuda, but in any part of the world, properties don't creep up in valuation over four years," he said.

David Kessaram appears for ASK, Solicitor General Wilhelm Bourne represents Magistrate Edward King who issued the search warrants. Shade Subair also appears for the Police.

The hearing continues today.