An alleged dissident republican told an undercover secret service agent that his "friends" had bought a rundown house in the south of France.
The premises were to be used to store guns bound for the Real IRA in Northern Ireland the agent, known only as "Ali," told Belfast Crown Court.
The disclosure came during a meeting with Paul Anthony John McCaugherty in Bruges in Belgium.
He is one of three men on trial over a plot to smuggle weapons into NI.
The witness said Mr McCaugherty who was calling himself "Tim" told him that the house in a small village in France had been purchased for 23,000 euro and another 5,000 or 6,000 euro would be spent to make it habitable.
He said Mr McCaugherty also mentioned a trailer which was waiting in Spain and which had been fitted with a false floor and lead plates to deflect scanners from finding hidden weapons.
The County Armagh trio of Mr McCaugherty, from Beech Court, Desmond Paul Kearns, 44, from Tannaghmore Green, both Lurgan, and 41-year-old Dermot Declan Gregory, also known as Michael Dermot Gregory from Concession Road in Crossmaglen, deny a total of eight charges.
The prosecution case is that during a two-year security services operation between August 2004 and June 2006, Mr Kearns, going by the name of 'John' acted as a go-between, and Mr McCaugherty, calling himself 'Tim', handled the money and negotiated the deals, and that Mr Gregory handled a Portugeuse restaurant being used to raise funds for a terrorist goup.
"Ali" told the court that after the meeting in Bruges "Tim" gave him a bag which he later discovered contained 18,000 Euro.
He said the bag was extremely heavy because it also had two lead plates inside, again to deflect X-ray scanners.
The court also heard that at one point, "Tim" also told "Ali" about how money was raised in Ireland through a pyramid scheme which was a "semi-con" in which people donated sums of up to £7,000.
The trial continues.