David Gaut, 54, was killed after he was released from a 32-year jail term to move into the quiet village of New Tredegar, Gwent.
Three men are accused of murdering Mr Gaut by stabbing him 150 times after finding out he was convicted of the murder of a 17-month-old boy.
Neighbour Kyle Alford, 31, said: “Straight away, he said he had been in prison. He said he’d killed a soldier.”
But the court heard how Alford discovered Gaut was convicted for the murder of toddler Chi Ming Shek and jailed for life in July 1985.
Mr Alford made the discovery after searching Gaut's name on Google where he found "a site with all the murders on it".
He told the jury he felt "shocked, disgusted and angry" at the discovery and then told fellow neighbour David "Ozzy" Osborne.
Mr Alford said: "Osborne was fuming. Angry, very angry. Just about wanting to beat him up really.
"Ozzy made a comment, want to cut him up and chuck him down the plughole or something."
Osborne was fuming. Angry, very angry. Just about wanting to beat him up really.
Fellow neighbour Ieuan Harley then became "angry" at the news – calling Gaut a "dirty f***er" before allegedly planning his murder.
Osborne is alleged to have lured Gaut to his flat by asking him round to the flat to watch a DVD.
There, Osborne, 51, Harley, 23, and Darran Evesham, 47, are alleged to have stabbed Gaut to death before dragging his dead body back next door and trying to clean up the crime scene.
Ben Douglas-Jones, prosecuting, said pathologist Dr Derrick James carried out a post-mortem and found at least 150 stab wounds all over Gaut's body from at least one knife and a screwdriver.
He said: "A screwdriver was found in the folds of his dressing gown. The injuries to his neck appear to have been consistent with the screwdriver found in the folds of the dressing gown.
“Many of the stab wounds are consistent with having been made with knives.
“He had been clearly stabbed many times until he was dead. Even then, he continued to receive stabbing blows.
“All three wanted him dead. They encouraged each other and played their parts in the lead-up to the murder.”
The trial at Newport Crown Court is expected to last four weeks.
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