The jury in a massive fraud and theft trial was yesterday urged by a judge to judge the case solely on the evidence presented.

Puisne Judge Richard Ground reminded the jury that defence counsel Julian Hall had suggested "in very strong terms'' that the case was racially-motivated.

He was speaking as he delivered his summing up of the evidence in the trial of former Bank of Bermuda chief Arnold Todd, Varnel Curtis, Milton Woods and Cecil Durham.

Mr. Justice Ground said: "I don't want to say too much about that -- you should judge this case on the evidence you have heard in respect of these four gentlemen without prejudice, without fear or favour.'' And he cautioned the all-black 12-strong jury: "If at the back of your minds you are worried about this....you might begin to address this question by asking what race was Merkell Smith? It is he who ends up at the moment owing $181,000.'' Mr. Smith, who is black, gave evidence earlier in the case, telling the jury that he had become involved with Todd in the purchase of Windswept Cottage, St. George's in 1985.

He told the court he had been working as a painter and carpenter for Delro Construction boss Delmont Talbot and Mr. Talbot had approached him about buying a house the firm was working on for what he recalled was a price of $230,000.

Mr. Smith said he had agreed to the deal -- but that a Bank of Bermuda loan form had not been filled in by him and that details referring to a substantial rental income and $60,000 on deposit were wrong.

He also identifed a $125,000 mortgage agreement in his name from real estate firm L.P. Gutteridge.

But Mr. Smith said that, while he recalled visiting the firm, he had not understood he was arranging a mortgage.

He added that the house had later been sold but that he played no part in that decision or made a profit on the sale -- although he still owed money on the deal.

Mr. Ground also referred to claims by Mr. Hall, who represents Cecil Durham, that there had been no evidence that the Bank of Bermuda had lost "a single dollar'' as a result of Todd's alleged activities.

He pointed out that Mr. Smith had "ended up owing the bank $181,000 -- whether Mr. Smith is liable for that or the Bank of Bermuda picks up the bill, it's somebody's responsibility, it's somebody's loss.'' But he said the jury may also want to consider whether Mr. Smith's position should affect the way they view his evidence. Todd, 57, of Pearman's Hill, Warwick, faces 17 counts of theft, fraud and false accounting, which allegedly took place between 1985 and 1990, when he was a senior loans officer at the Bank of Bermuda.

The prosecution claims he submitted bogus loan applications and that he used several companies to disguise his actions.

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

All three men face charges relating to the allegations faced by Todd. The alleged offences faced by the four -- involving around $1.2 million in total -- are all denied.

Mr. Justice Ground told the jury that they must be sure the evidence is strong enough for them to convict.

He said: "You must be sure that Mr. Todd committed the relevant offence. Then you have to be sure that Mr. Curtis, Mr. Woods and Mr. Durham knew at the time what Mr. Todd was doing -- then you would have to be sure that the three did something to help Mr. Todd commit the offence.'' Mr. Ground reminded the jury of evidence given by Bermuda Industrial Union boss Derrick Burgess, who had taken a construction job with Delro after he lost his bartending job when Club Med in St. George's closed.

Mr. Burgess told the court he arranged finance through Todd at the Bank of Bermuda to buy a house from Mr. Talbot.

He added he thought he had become the owner of the house, at Rosehill, but later found it had been sold to someone else.

Mr. Ground said that Mr. Burgess told the court that he had made no repayments on the loan and was not aware of any repayments being made -- and that he saw no profit from the sale.

Mr. Burgess denied under cross-examination that he had been to LP Gutteridge in connection with a loan prior to visiting the Bank of Bermuda.

Also, in a pre-trial statement, Mr. Burgess said he installments were to be paid on the Rosehill house through an arrangement between Mr. Talbot and Todd.

But he said in court he had made no arrangements as to how the payments would be made.

"Did he appear like a man who was telling the truth or a man who was being evasive and had something to hide,'' asked Mr. Justice Ground.

"I don't know the answer to that and it's something you must ask yourself in relation to Mr. Burgess.'' Mr. Justice Ground continues his summing-up on Monday.

Arnold Todd