pretences during the fraud trial of a senior bank executive.

David Alexander Diggins, 49, of Somerset was employed at the Bank of Butterfield as a senior manager responsible for international and foreign loans.

He was initially charged with stealing $2,812,500 and obtaining the money under false pretences and with intent to defraud, inducing Mary Faries to deliver the money to Neway Property Ltd. without proper authorisation on August 29 last year.

However those charges were dropped yesterday morning when Solicitor General Barrie Meade issued a Nolle Prosequi.

This meant that he was no longer prepared to proceed on either the stealing or the obtaining money by false pretences charges as they first appeared on the indictment.

Consequently, Diggins now stands accused of fraudulent false accounting. It is alleged that on August 25, 1995 he falsified a report and its supporting documents.

Secondly, it is alleged that he obtained a valuable security by false pretences on August 28 and with intent to defraud caused Mary Faries to send $2,812,500 ( 1,504,991.93) to National Westminister Bank in London.

In his opening statement to the jury, Mr. Meade said that the Crown would seek to prove that Diggins used his position as a senior manager in charge of credit to process a loan though the Bank of Butterfield without authorisation.

And he then sent the money to an organisation that his employers would not normally have lent any money to, Mr. Meade said.

He asserted that Diggins prepared the necessary paper work by inserting false information and then used it to get the loan.

Moreover, Mr. Meade said Diggins then took that paperwork to Mrs. Faries and convinced her that the bank's senior credit committee would approve his request.

Mrs. Faries prepared the documents which enabled the money to be transferred from the Bank of Butterfield to the National Westminister Bank in London in favour of Neway Properties Ltd.

Mr. Meade said Mrs. Faries assumed that Diggins was telling her the truth and that is why she followed his instructions.

Diggins, as a senior loan officer, could loan as much as $250,000 without referring to anyone else if that loan was backed by the proper security.

In 1995, the Crown allege that he arranged a loan for a Gibraltar-based company called Neway Properties Ltd.

The money was to be used to purchase a property near Piccadilly Circus in London known as the Moulin Complex. The property had a selling price of 1,610,000.

Financing took place between July and August 1995 but it exceeded his $250,000 personal lending capacity and he needed approval from the senior credit committee.

On August 25, 1995, the Crown said that Diggins contacted senior credit committee member Clarendon (Hal) Masters.

Mr. Meade said Diggins showed Mr. Masters the falsified accommodation report and its supporting documents relating to the Moulin Complex property and Mr.

Masters countersigned it.

The endorsed form now needed to be placed before either the senior credit committee or it required a third signature from a member of that committee.

Mr. Meade said Diggins never placed the loan paperwork before the committee and failing that he never got a third signature as regulations required.

The loan went through and the property was purchased on the strength of a quick sale to another buyer who wanted to acquire the property.

Had the sale gone through as planned, a tidy profit could have been realised and the loan could have been repaid in under nine months.

But the Moulin Complex was the subject of a "safeguard notice'' because the British Department of Transport was looking at the possibility of building an underground line that would run North to South in the City of London.

It was planned to pass under the Moulin Complex with a possible substation built on part of the Moulin property.

These contingencies, Mr. Meade alleged, were never made clear to Mr. Masters.

Early in 1996, senior management became suspicious of Diggins and authorised William Graham, chief of security at the Bank of Butterfield, to seize documents from Diggins' office.

They also seized an IBM think pad lap top computer from his office and made a detailed examination of all its files and accompanying diskettes.

The case continues today before Puisne Judge Richard Ground. Diggins is represented by lawyer Julian Hall. Nita Grewal is assisting Mr. Meade.