A 14-year-old girl was strangled before being dismembered by the owner of a Blackpool kebab shop, a court heard.
Charlene was 14 years old when she disappeared
Iyad Albattikhi, 29, had sex with Charlene Downes before killing her, then joking her body had been put into his kebabs, Preston Crown Court heard.
Witness David Cassidy, of Blackpool, told the jury that details of the murder emerged from the defendant's brother after the pair fell out.
Mr Albattikhi, of Dickson Road, Blackpool, has denied murder.
Mr Cassidy, 40, who ran an amusement arcade in the town, told the jury Tariq Albattikhi was emotional when he told him about how Charlene had been killed.
"He was crying," Mr Cassidy said.
"He said there was a lot of blood. I was only getting a bit of the conversation through the tears.
"He told me that she was strangled."
During his testimony, Charlene's mother, Karen Downes, fled from the public gallery in tears.
The court has heard how the schoolgirl disappeared on the evening of Saturday 1 November 2003 after telling her mother she was going out with friends.
Police started a missing persons inquiry, but later launched a murder probe after information about her death "leaked out".
No trace of Charlene's body has been found.
Mr Albattikhi - owner of the Funny Boyz takeaway on Blackpool Promenade - is charged with murder.
His co-accused and business partner, Mohammed Reveshi, 50, also from Blackpool, is accused of helping to dispose of the body.
Both deny the charges and have told police they never knew Charlene.
Ian Goldrein QC, defending Mr Albattikhi, told the court that Mr Cassidy had a long criminal record for dishonesty and suggested he was telling a "pack of lies".
He asked the witness why he waited months after the conversation with Tariq Albattikhi before he told police.
Mr Cassidy said: "Because I did not know if what was being said to me that night was true. I had to determine whether it was hearsay or gossip."
The trial continues.