Senior Vatican cleric arrested in Italian cash-smuggling investigation

Monsignor suspected of trying to help bring millions of euros into Italy illegally by plane

PUBLISHED : Saturday, 29 June, 2013, 12:00am
UPDATED : Saturday, 29 June, 2013, 4:59am

A senior Catholic cleric with connections to the Vatican bank was arrested yesterday for plotting to help rich friends smuggle tens of millions of euros in cash into Italy from Switzerland.

Monsignor Nunzio Scarano, 61, who worked as a senior accountant in the Vatican's financial administration, was arrested along with an Italian secret service agent and an intermediary.

Details of the case against Scarano emerged just two days after the Vatican announced that Pope Francis had set up a commission of inquiry into the Vatican bank, formally known as the Institute for Works of Religion, which has been hit by a number of scandals in the past decades.

Scarano, who was arrested in Rome and taken to the city's Queen of Heaven jail, had hatched a plot to take up to €40 million (HK$404 million) into Italy for a family of shipbuilders in his hometown of Salerno in southern Italy, magistrate Nello Rossi said.

Rossi is already investigating the Vatican bank for money laundering, and the latest arrests stemmed from that. He and fellow magistrate Stefano Pesci said there was no indication so far that the bank was directly involved in the attempt to bring the money into Italy.

Scarano is under separate investigation in southern Italy in relation to his accounts in the Vatican bank.

According to Rossi, in July last year Scarano engaged Giovanni Zito, a paramilitary Carabiniere policeman on loan to the secret services, to help him get the money, in a Swiss bank, into Italy without tax and customs controls. The third person arrested was Giovanni Carenzio, a financial broker with offices in Switzerland and the Canary Islands who was acting as the fiduciary for the owners of the money.

The three originally planned to bring in €40 million in cash, but later reduced it to €20 million.

A private plane went to Locarno from Rome and waited several days before returning to Rome without the money. The cash never left Switzerland because of disagreements and nervousness among the three, Rossi said.

Even though the money never left the Swiss bank, Zito demanded the payment he had been promised for his services.

Scarano gave Zito two cheques, one for €400,000 and another for €200,000. Zito cashed the first cheque, but Scarano blocked the second before Zito could cash it.

Asked if money laundering was involved, Rossi said that would depend if the investigation determined the original source of the money was criminal activity.

Holy See spokesman Father Federico Lombardi said Vatican authorities stood ready to co-operate with the Italian investigation. He said the Vatican's financial intelligence authority was following the case and would take action if necessary.