fraud case against Arnold Todd and three others were recalled to the witness stand yesterday.

Bank of Bermuda executive John Fargey, who gave evidence at the marathon Supreme Court trial last month, told the court that he was involved in the search of Todd's office at the bank in January 1991 after Todd was suspended.

He said a list of files was made by name and the intact files were then put in boxes, sealed and locked in the bank's vaults.

Mr. Fargey told the court he was present when the files were opened in 1991 and that nothing was removed.

He added he had not seen them since until last Friday when they were re-opened in the presence of a Police officer and a former internal auditor at the bank.

Mr. Fargey agreed with John Perry QC, acting with barrister Kim White for Todd, that procedures at the bank became stricter after his arrival in 1989.

He said: "I would say that policies and procedures were in place and maybe they weren't followed as carefully as we followed them subsequent to my coming on the scene.'' Mr. Perry suggested that policies and procedures at the bank were intended to be guidelines rather than hard-and-fast rules.

Mr. Fargey replied: "In terms of policy manuals and procedures, I think all of these are intended to be guidelines that are followed generally.

"You can't go down a straight line without varying -- but you can't stray too far from it.'' Anne Richmond, former conveyancing clerk at Todd's lawyers, Vaucrosson's, who gave evidence earlier, was recalled at the request of Mr. Perry.

She told the court she spoke to Todd in connection with a telephone call from Bank of Bermuda senior official Arthur Haycock in relation to a shortfall of a loan in the name of Arthur Smith.

Mrs. Richmond said: "He told me it was going to be paid off in a couple of months.'' Mr. Richmond said she had also spoken to lawyer Charles Vaucrosson about the same matter.

And she admitted she could not absolutely say that she was not mistaken about the Todd call and that she had only spoken to Mr. Vaucrosson.

Todd faces 17 charges of theft, fraud and false accounting, allegedly committed between 1985 and 1990.

It is alleged he used his position as a senior loans officer at the bank to submit bogus loan applications and that he used a network of companies to disguise his actions.

In the dock with Todd, 56, Pearman's Hill, Warwick, are importer Varnel Curtis, 49, of St. Anne's Drive, Southampton; hotel security chief Milton Woods, 61, of Old Road, Southampton and businessman Cecil Durham, 56, of Ramgoat Hill, Smith's Parish.

The three all face allegations relating to the counts against Todd. All four accused deny all the charges, which involve around $1.2 million.

Senior Bank of Bermuda internal auditor Guy Kelly told Crown counsel Michael Pert QC that he became involved with the investigation into Todd's alleged activities in 1991.

And he said that when Police became involved he was part of the team putting together files which were handed over to detectives from the fraud squad.

He added that all the bank documents produced in court were checked against originals or microfiche records.

Mr. Kelly identified paperwork from several financial transactions allegedly involving Todd and companies claimed to be under his control.

The trial, before Puisne Judge Richard Ground, continues.