Bermuda's Bank of Butterfield was involved in a million-dollar money Canadian court case where a top judge was convicted of money-laundering cocaine cash for a client.

When questioned earlier this week, a Bank of Butterfield spokesman said: "It's not something we know anything about.'' But yesterday the spokesman denied the bank had lied about its involvement.

He said: "It's just not something the people I checked with were familiar with at all.

"Perhaps I have spoken to the wrong people -- certainly the people I spoke with, they said it was not something where the names involved rang a bell.'' And he said the cash may have been deposited under a corporate name or a company name.

Montreal court records from the trial of judge Robert Flahiff show the bank was used on three occasions to launder dirty money from drugs deals.

Quebec judge Flahiff -- then in private practice -- was found guilty of three counts of money laundering for former client Paul Laroue.

And transcripts of evidence show that between January 1990 and March 1991, Flahiff, under his own name, and another lawyer, who has yet to face trial, made three deposits at the Bank of Butterfield.

The Crown claims both lawyers must have at least suspected the money was dirty before agreeing to handle it.

The court heard $CAN1.65 million was sent from Canada, through banks in Bermuda, Hong Kong, elsewhere in Canada and back to Quebec.

And documentary evidence showed some of the cash -- a total of $CAN60,000 -- was funnelled through the Bank of Butterfield in a bid to disguise its origins.

The Bank of Butterfield spokesman, however, echoed earlier comments by Bermuda Monetary Authority chief Malcolm Williams that regulations to combat the scourge of money-laundering were much tougher today than they were in the early 90s.

The spokesman said: "I would think so -- regulations and rules under which we operate are very much different from what they were ten years ago.

Mr. Williams said on Monday: "This case might have got under the curtain before it came down altogether.'' The Island's financial institutions adopted a voluntary code of conduct to beat dirty money in the early 90s and the hard-hitting Proceeds of Crime Act was passed last year.

And Mr. Williams said the Island was now recognised as being "as clean as anywhere else in the world, not just offshore centres, but anywhere in the world.'' Flahiff and another lawyer were charged in 1997 after a four-year probe by Montreal police and the Royal Canadian Mounted Police.

The investigation began after the former client, ex-bouncer Larue, was nabbed in a massive US cocaine sting operation.

He turned stool pigeon with a promise of a "Canadian judge's head on a platter'' in return for a cut-rate sentence.

COURTS CTS