Monsignor with senior church finance role held along with secret services agent and Swiss broker over alleged plot
A senior Vatican cleric has been arrested along with a member of Italy's secret services and a financial broker on suspicion of plotting to smuggle €20m (£17m) into the country illegally on board a plane from Switzerland.
Nunzio Scarano, a prelate from Salerno in southern Italy, reportedly known as "monsignor 500" for his fondness for high denomination euro notes, was arrested in Rome on suspicion of corruption and slander for his alleged part in an aborted plan to bring back millions of euros to Italy in July last year on behalf of some rich friends.
He was yesterday detained in Rome's Regina Coeli (Queen of Heaven) prison.
Despite the fact that prosecutors do not believe the Vatican bank was directly linked to the alleged plot, the arrests, which stem from a wider investigation into the secretive bank, are likely to bring fresh embarrassment for the Vatican in the era of a pontiff who has said he wants "a poor church" and ethical finance.
In the alleged plot, with all the ingredients of a thriller, prosecutor Nello Rossi told reporters that the prelate had approached Giovanni Zito, an agent with the Italian secret services, to ask him whether he could help facilitate an "intricately planned" scheme to return the money on board a private plane from Locarno without having to pass customs.
The money had been given to Giovanni Carenzio, a Swiss-based broker, to invest, Rossi said, and between them the three planned to bring back €40m to Italy, a figure later reduced to €20m.
The plan was not carried out, Rossi said, due to disagreements among the three.
Contacted by the Associated Press, Scarano's lawyer, Silverio Sica, said his client had just been a middleman trying to help his friends.
Until recently, Scarano was employed as an accountant in the Administration of the Patrimony of the Apostolic See (APSA), a unit inside the Vatican that deals with property owned by the Holy See and is separate from the Vatican Bank, known officially as the Institute for Religious Works (IOR). But, when, more than a month ago, they were told the cleric was under investigation by prosecutors in his native Salerno looking into separate allegations of money laundering, his superiors suspended him, the Vatican's spokesman Federico Lombardi said.
Scarano, who is in his early 60s, was being investigated on suspicion of using €560,000 of donations in a personal IOR account to pay off his personal mortgage in Italy. To do so he allegedly asked 56 friends to accept €10,000 each in return for a cheque to an Italian bank account. The funds had been intended for a home for the terminally ill. Speaking on behalf of his client, Sica has said Scarano only took the money "temporarily" and had intended to use the proceeds of the property sale to pay it back. In an interview, Scarano denied having ever stolen or laundered money.
In a statement on Friday, Lombardi said: "The Holy See has not yet received any request on this issue from the relevant Italian authorities, but confirms its availability for full collaboration." The FIA, the Vatican's internal financial watchdog, was following the matter and would "if necessary, [take] the appropriate measures".
Rossi said permission would be sought to question Vatican officials. "This is just a piece of a much larger mosaic," he said.
A spokesman for the Vatican Bank said it was cooperating and its board had launched an internal investigation.
The bank – which has around 19,000 accounts but does not lend money and does not consider itself a bank in the standard sense – has long been a cause of embarrassment to the Roman Catholic church, repeatedly finding itself in the eye of scandal.
Recently, the Vatican Bank has been making efforts to reform and become more transparent, but a report by Moneyval, a Council of Europe committee, last year indicated it had a long way to go before it could hope to be added to the EU's "white list" of countries meeting international banking norms.
Francis, the Argentinian pontiff, who has shunned the Vatican's apostolic palace for simpler accommodation, has made no secret of his desire to see global ethical financial reform, and observers said his decision on Wednesday to set up a commission of inquiry into the Vatican Bank showed his desire to get to grips with financial activities in his own backyard.