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Cleric and 2 Others Arrested in Vatican Bank Inquiry Cleric Arrested in $26 Million Plot, Leaving New Blot on Vatican Bank
(about 4 hours later)
ROME — A Vatican official. A private plane. And 20 million euros in cash.ROME — A Vatican official. A private plane. And 20 million euros in cash.
Claiming to have foiled a caper worthy of Hollywood, or at least Cinecittà, the Italian police on Friday arrested a prelate and two others on corruption charges as part of a complex plot last summer in which they say the priest — already suspected of money laundering — plotted to help wealthy friends sneak the money, the equivalent of about $26 million, into Italy while evading financial controls. Claiming to have foiled a caper worthy of Hollywood, or at least Cinecittà, the Italian police on Friday arrested a prelate and two others on corruption charges, saying that the priest plotted last summer to help wealthy friends sneak the money, the equivalent of about $26 million, into Italy while evading financial controls.
Along with the prelate, a financial broker and a military police agent deployed to the Italian Secret Service were arrested and charged with corruption, and the priest also with slander, in an investigation that developed out of a broader three-year inquiry into the Vatican Bank. The case is the latest black mark on the bank, which under Pope Francis and Benedict XVI has been trying to shake its image as a secretive offshore haven and bring itself into compliance with European norms so that it could use the euro. Along with the prelate, a financial broker and a military police agent deployed to the Italian Secret Service were arrested after an investigation that developed out of a broader three-year inquiry into the Vatican Bank. The case is the latest black mark on the bank, which under Pope Francis and Pope Benedict XVI has been trying to shake its image as a secretive tax and money laundering haven and bring itself into compliance with European norms so it can use the euro.
Rome prosecutors say the three men hired a private plane last July with the intention of bringing the cash into Italy from Locarno, Switzerland. The money was to be carried by the Secret Service agent, who would not be required to declare it at the border. But the scheme fell through, the prosecutors said, as the three began bickering and, eventually, lost their nerve. Cellphones used by the three in arranging the money transfer were later burned, prosecutors said. Rome prosecutors say the three men hired a private plane last July with the intention of bringing the cash into Italy from Locarno, Switzerland. The money was to be carried by the Secret Service agent, Giovanni Maria Zito, who would not be required to declare it at the border. But the scheme fell through, the prosecutors said, as the three began bickering and, eventually, lost their nerve. Cellphones used by the three in arranging the money transfer were later burned, prosecutors said.
The European Union and the United States have served notice in recent years that they will no longer tolerate tax havens like Switzerland, Luxembourg and the Cayman Islands, and the wall of secrecy they flourished behind. As a result, major account holders have been growing increasingly nervous. The European Union and the United States have served notice in recent years that they will no longer tolerate the wall of secrecy in tax havens like Switzerland, Luxembourg and the Cayman Islands. As a result, major account holders have been growing increasingly nervous.
Nello Rossi, the Rome prosecutor who led the investigation, said that wiretaps had picked up people discussing how the 20 million euros in Switzerland was tied to the D’Amico family, Salerno shipping magnates. Nello Rossi, the Rome prosecutor who led the investigation, said that discussions picked up on wiretaps seemed to indicate that the 20 million euros in Switzerland was tied to the D’Amico family, Salerno shipping magnates.
Even before his arrest on Friday, the prelate, Msgr. Nunzio Scarano, was no stranger to the authorities. An employee of Deutsche Bank before entering the priesthood, and until recently an accountant in a top Vatican financial office that oversees the Catholic Church’s real estate holdings, Monsignor Scarano was under investigation by magistrates in Salerno on accusations that he had illegally moved $730,000 in cash from his account in the Vatican Bank to Italian banks, his lawyer said. Even before his arrest on Friday, the prelate, Msgr. Nunzio Scarano, was known to the authorities. An employee of Deutsche Bank before entering the priesthood, and until recently an accountant in a top Vatican financial office that oversees the Catholic Church’s real estate holdings, Monsignor Scarano was under investigation by magistrates in Salerno on accusations that he illegally moved $730,000 in cash from his account in the Vatican Bank to Italian banks, his lawyer said.
Monsignor Scarano’s lawyer, Silverio Sica, said his client would contest the charges. “I am certain he will want to speak to prosecutors to clarify his position,” Mr. Sica said. He added that Monsignor Scarano had had no previous dealings with the police or with judicial investigations.
In a statement on Friday, the Vatican spokesman, the Rev. Federico Lombardi, said that Monsignor Scarano had been suspended from his position at the Vatican “more than a month ago, ever since his superiors were informed that he was under investigation.”In a statement on Friday, the Vatican spokesman, the Rev. Federico Lombardi, said that Monsignor Scarano had been suspended from his position at the Vatican “more than a month ago, ever since his superiors were informed that he was under investigation.”
He added that the Holy See “has not yet received any requests from the competent Italian authorities, but confirms its willingness for full collaboration,” and that the Vatican’s internal financial watchdog was following the matter and would take “if necessary, the appropriate measures in its competency.” That could include requesting that a Vatican prosecutor open an internal investigation into the monsignor. He added that the Holy See “has not yet received any requests from the competent Italian authorities, but confirms its willingness for full collaboration,” and that the Vatican’s internal financial watchdog was following the matter and would take, “if necessary, the appropriate measures in its competency.”
Rome prosecutors accuse Monsignor Scarano of having engaged Giovanni Maria Zito, a military police officer at the time working for Italy’s domestic secret service, to recover the $26 million in Switzerland and bring it to Italy, said Silverio Sica, Monsignor Scarano’s lawyer. Only priests, members of religious orders, Catholic institutions, employees of the state of Vatican City and diplomats accredited to the Holy See are allowed to keep accounts at the Vatican Bank, known as the Institute for Works of Religion. But rumors have long swirled that accounts were being used as fronts for other interests, including organized crime and Italian politicians.
The money belonged to friends of the prelate, who had invested the sums in Switzerland with Giovanni Carenzio, a broker, but now wanted the money back. Monsignor Scarano entrusted the task to Mr. Zito, who as a secret service officer would not have to pass through customs. “Don Nunzio was only an intermediary to try and recover this money,” Mr. Sica said. In the Salerno case, prosecutors accuse Monsignor Scarano of having illegally moved 560,000 euros, equivalent to $730,000, from his account in the Vatican Bank. Mr. Sica said that the monsignor had told prosecutors that the money came from a “generous donor” and was intended to finance a hospice for terminally ill patients in Salerno.
When he got to Switzerland last year, Mr. Zito was unable to retrieve the funds because disagreements arose with Mr. Carenzio, so he returned to Italy and demanded the $780,000 that he had been promised to act as the courier.
“Don Nunzio had no choice but to pay,” said Mr. Sica, and the prelate issued two checks, one for $520,000, which was cashed. But Monsignor Scarano blocked the second check, reporting it as lost. “He didn’t want to pay the remaining $260,000,” his lawyer said.
Prosecutors accuse the prelate of making a false claim, pretending the check was lost when he knew otherwise. He is also accused of corrupting Mr. Zito.
“I am certain he will want to speak to prosecutors to clarify his position,” Mr. Sica said of his client. He added that Monsignor Scarano had no previous dealings with the police or with judicial investigations.
Only priests, members of religious orders, Catholic institutions, employees of Vatican City State and diplomats accredited to the Holy See are allowed to keep accounts at the Vatican Bank, known as the Institute for Works of Religion. But rumors have long swirled about accounts being used as fronts for other interests, including organized crime and Italian politicians.
In the Salerno case, prosecutors accuse Monsignor Scarano of having illegally moved 560,000 euros, equivalent to $730,000, from his account in the Vatican Bank. He told prosecutors that the money had come from a “generous donor.”
According to Mr. Sica, the prelate needed the sum to pay off a mortgage on a personal apartment. Because of “controversial reasons of a family nature,” Monsignor Scarano had been advised to ask 56 friends to accept 10,000 euros apiece, in exchange for money transfers in the same amount, Mr. Sica said. All 56 are also being investigated by Salerno prosecutors.According to Mr. Sica, the prelate needed the sum to pay off a mortgage on a personal apartment. Because of “controversial reasons of a family nature,” Monsignor Scarano had been advised to ask 56 friends to accept 10,000 euros apiece, in exchange for money transfers in the same amount, Mr. Sica said. All 56 are also being investigated by Salerno prosecutors.
The authorities, who have accused Monsignor Scarano of laundering the money, said he had another reason. “He split the money up so it wouldn’t be as noticeable,” said Franco Roberti, the chief prosecutor of Salerno.The authorities, who have accused Monsignor Scarano of laundering the money, said he had another reason. “He split the money up so it wouldn’t be as noticeable,” said Franco Roberti, the chief prosecutor of Salerno.
The investigation came about after Monsignor Scarano reported a break-in at his apartment late last year, during which the thieves made off with precious paintings and silver artifacts. Prosecutors investigating the theft “became interested in establishing where the works of art had come from, and how they had come into his possession,” Mr. Sica said. That led to the discovery of the movement of 560,000 euros that set off the investigation. The investigation came about after Monsignor Scarano reported a break-in at his apartment late last year, during which the thieves made off with precious paintings and silver artifacts. That led to questions about where the art had come from, Mr. Sica said, and then to the discovery of the moving of the 560,000 euros.
Mr. Sica said that Monsignor Scarano’s aims were purely altruistic. The money came from a donor, and he wanted to put the apartment up for sale and use the proceeds to finance a hospice for terminally ill patients in Salerno. The arrests Friday were the most dramatic events to emerge from the Rome prosecutors’ investigation into the Vatican Bank since 2010, when prosecutors seized $30 million from two external accounts used by the Vatican Bank and placed its then-president and director general under investigation. The money was later ordered unfrozen after the Vatican created an internal financial watchdog in 2010, but it has not yet been released.
The arrests Friday were the most dramatic events to emerge from the Rome prosecutors’ investigation into the Vatican Bank since 2010, when prosecutors seized 23 million euros from two external accounts used by the Vatican Bank and placed its then-president and director general under investigation. The money was later ordered unfrozen after the Vatican created its internal financial watchdog in 2010, but it has not yet been released. The collaboration between the Vatican and investigators in the case was virtually unprecedented, Giacomo Galeazzi, who follows the Vatican for the Turin newspaper La Stampa, said in a telephone interview. In the past, the Vatican had always resisted when asked to assist in judicial matters, he said, citing a famous kidnapping case that involved the daughter of a Vatican employee, Roberto Calvi, as well as the investigation into the assassination attempt on Pope John Paul II.
Vatican experts said that the collaboration between the Vatican and investigators in the case was unprecedented, Giacomo Galeazzi, the Vaticanista for Turin-daily La Stampa, said in a telephone interview. In the past, the Vatican had always resisted when asked to assist in judicial matters, he said, citing a famous kidnapping case that involved the daughter of a Vatican employee, Roberto Calvi, known as God’s Banker, as well as the investigation into the assassination attempt on Pope John Paul II. “This time the collaboration is real, and the Vatican has announced that it would do its own internal investigation,” Mr. Galeazzi said. “That marks a real change of climate.” That change can be attributed in part to Pope Francis, but also to the influence of the American Catholic church. The American cardinals “were very upfront about the need to clean up the Vatican Bank,” he said. “This pope could not deny the prosecutors any assistance.”
“This time the collaboration is real, and the Vatican has announced that it would do its own internal investigation. That marks a real change of climate,” Mr. Galeazzi said. That change can in part be attributed to Pope Francis, but also to the influence of the American Catholic church. “The American cardinals who were decisive in electing Bergoglio were very upfront about the need to clean up the Vatican Bank. This pope could not deny the prosecutors any assistance,” he said.