Express Newspapers continued using a private detective for more than five years after he was convicted of illegally accessing personal data, the Leveson Inquiry heard today.
The group, which publishes the Daily Express, the Daily Star and their Sunday sister titles, commissioned Steve Whittamore's company to carry out searches as recently as July 2010.
Investigators from the Information Commissioner's Office uncovered a "treasure trove" of evidence linking newspapers to the sale of private information when they searched Whittamore's Hampshire home in March 2003, the inquiry has heard.
The private detective was charged in February 2004. He was convicted of illegally accessing data and received a conditional discharge at London's Blackfriars Crown Court in April 2005.
Nicole Patterson, the head of legal for Express Newspapers, told the Leveson Inquiry an internal audit revealed that her company used Whittamore's firm JJ Services until July 30, 2010.
She could not explain a payment to JJ Services for £2,287.50 or confirm whether the Daily Express and Daily Star still commissioned the private detective.
Robert Jay QC, counsel to the inquiry, asked her: "Someone might say there is at the very least a cloud hanging over him (Whittamore), as he has a criminal conviction.
"You are still using him - why not find out from him what methods he employs?"
Patterson replied: "It's a matter for the news editor and the editor. It's not something that's within my remit, I'm afraid, and I can't speak for them."
The lawyer said Express Newspapers used four other search agencies - Express Locate, Longmere Consultants, Searchline and System Searches - to provide journalists with information such as addresses and phone numbers.
She said she believed they were "totally legitimate" companies and operated entirely legally.
"I'm not sure that when you employ anybody, that you ask in great detail how they go about doing what they do," she said.
"You employ a company to do something for you and you expect that they would do it within the law."
Patterson said Express Newspapers' audit revealed that the group spent about £115,000 on search agencies over 10 years, compared with £9 million on pictures in 2008 alone.
Express Newspapers also launched an internal review in the light of the phone hacking scandal at the News of the World, the inquiry heard.
Patterson said: "We haven't found any evidence to suggest that anybody was doing any phone hacking or anything of that nature."
Daily Star editor Dawn Neesom told the inquiry that entertaining the readers "doesn't necessarily mean you can just make a story up".
Former Daily Star journalist Richard Peppiatt has claimed previously that the newspaper shaped stories to fit its "ideological perspective" and that quotes and details of articles were regularly made up.
But Neesom insisted that stories had to be "accurate and true".
Asked whether the tabloid resorted to spinning them to make them more entertaining, she said: "I think the Daily Star has a certain style of writing that appeals to its readers and stories are written in a way that appeals to the readers."
Peppiatt also accused the paper of having an "obsession" with glamour model Katie Price, the inquiry heard, but Ms Neesom denied that stories about her had been "embroidered".
She said: "I've known Katie since she was 17 years old and believe me, Katie doesn't need help in embroidering her life, she does that quite well herself."
The tabloid always employs journalists who value accuracy "above all else", she added.
And it had come as a surprise to her that the paper used search agencies, the editor told the hearing.
"I wish I had known," she said.
She stressed that the paper always took note of privacy.
"It gets expensive if you don't," she added.