A Sutton Council employee was caught committing fraud by a reporter from a national newspaper disguised as a Bulgarian illegal immigrant, a court has heard.

Agnello De Souza, 68, of Mulgrave Road, Sutton, was arrested after a sting by The Sun at Sutton Civic Offices and the Holiday Inn using clandestine video and audio recording devices.

De Sousa, who was working as a council asylum officer, is now on trial at Croydon Crown Court for two counts of misconduct in a public office, one count of obtaining money by deception and one count of attempting to obtain money by deception.

Opening the prosecution case on Tuesday, Mark Kimsey said De Sousa housed a Romanian woman called Antoanela Colda in a flat in Cheam Road, Sutton, and got her to pay him £630 a month rent in cash.

At the same time, Sutton Council was paying rent for the property to the real owner who, along with the local authority, believed it was occupied by an asylum seeker, Mr Kimsey said.

"Asylum seekers regularly attend the civic offices in Sutton seeking accommodation," Mr Kimsey told the court. "That scheme has been abused which not only led to money being lost from public funds but legitimate asylum seekers not being able to obtain properties.

"The victim has also been abused because she handed over money and he has pocketed it."

Under questioning from Mr Kimsey, Mrs Colda, who was working as a nurse at West Middlesex Hospital, said she paid £3,150 to De Sousa between June and October 2004.

She said she thought De Sousa was collecting rent on behalf of the landlord, but became suspicious when she spoke to the property owner directly.

Mrs Colda said when she approached landlord Nigel Punter about an NHS living expenses form he said he thought she was an asylum seeker with a different name.

Mr Punter then confirmed Sutton Council was paying for the flat and it was after that she decided to email The Sun, Mrs Colda said.

Mrs Colda told the court a reporter called Harry MacAdam arranged for her to wear clandestine recording devices when she made a rental payment to De Sousa at Sutton Civic Offices on September 28, 2004.

At the same meeting, she said she asked De Sousa if he could find a flat for her Bulgarian friend.

Meetings between Mr MacAdam, who was in disguise as a Bulgarian, and De Sousa were then secretly recorded, including a rendezvous at the Holiday Inn at which the reporter handed over cash.

An article about the sting appeared in The Sun and De Sousa was arrested on October 19, 2004.

Cross examining Mrs Colda, defence counsel Joe Boothby said she had a criminal record for corruption in Romania and the whole thing was an "elaborate scam" to improve her position.

The trial continues.