Financial police in the southern Italian city of Salerno on Tuesday arrested Nunzio Scarano, a Vatican monsignor, for allegedly using his Vatican bank accounts to launder money. Scarano is already on trial for charges of conspiring to smuggle €20 million ($26 million) from Switzerland to Italy aboard a private jet to evade customs and taxes in June.
In his latest arrest, Scarano, who served as an accountant for the Vatican, is charged with transferring millions of euros made up of fictitious donations from offshore companies to his accounts at the Vatican bank. Police seized €6.5 million in real estate and bank accounts, plus his luxurious Salerno apartment, which was filled with fancy antiques and gilt-framed paintings.
A local priest was placed under house arrest and a notary public was arrested for their alleged involvement in the money laundering scheme, and 52 people in all are under investigation. Since Scarano’s health is ailing, his initial arrest in the smuggling case was reduced to house arrest, and the new warrant will also be served under house arrest.
Through his lawyer, Scarano contends that the donations were legitimately made by people acting in good faith to fund a home for the terminally ill. He admits that he used some of the money to pay off a mortgage, however.
Financial police contend that more than €5 million were given to Scarano by one of Italy’s most important shipping families, the d’Amicos, via offshore companies. They further allege that Scarano selected 50 friends to accept €10,000 each in exchange for a check or wire transfer in the same amount to evade suspicion for depositing the whole sum in an Italian bank.
The d’Amico family denies its involvement in a statement, and no one in the family has been arrested in conjunction with either case being pursued against Scarano.
Scarano was fired from his job at the Vatican after his first arrest, and the Vatican is conducting its own investigation of him. The Vatican’s investigation shows that about €7 million have come in and out of his Vatican accounts over the past decade.
Scarano’s original arrest in June led to the resignations of the Vatican bank’s top two managers, and Pope Francis has named a fact-finding commission to look into its activities and legal structure. The Pope has also mentioned rooting out corruption at the Holy See one of his top priorities.
Julie DiMauro is the executive editor of CPA Blog and can be reached here.