Vatican Cleric 'Monsignor 500' Arrested in Money Laundering Scandal

A Vatican cleric is among three people arrested by Italian financial police for allegedly trying to take €20m (£17m) in cash into the country from Switzerland aboard a government plane.

Monsignor Nunzio Scarano, who worked as an accountant in the Vatican's financial administration, was arrested in a parish on the outskirts of Rome. He was already under investigation by magistrates in the southern Italian city of Salerno, his home town, for a suspected money-laundering plot involving the Vatican's bank, the Institute of Religious Work (IOR).

Also arrested was Italian secret service agent Giovanni Maria Zito and a financial broker, Giovanni Carinzo. The three were accused of fraud, corruption and slander stemming from the IOR plot.

Monsignor Scarano - nicknamed Monsignor 500 for his habit of carrying in his pocket 500 euros' worth of cash - was asked by some "friends" to work with Carinzo, the broker, to return €20m that they had given him to invest. The identity of these friends is still unknown, according to police sources.

Scarano persuaded Carinzo to return the money with the help of Italian secret agent Zito.

The agent went to Switzerland to bring the cash back aboard a government aicraft, in order to prevent any reporting of the mission in Italy. When the job was complete, Zito demanded his €400,000 commission. Scarano paid an initial €200,000 by cheque.

But in a clumsy attempt to prevent the second installment of the commission being deposited, the monsignor filed a report for a missing €200,000 cheque. It is unclear why he wished to prevent the deposit.

After filing the report, Scarano was arrested by Italian financial police.

Existing inquiry

The Salerno investigation, in which Scarano is accused of money-laundering from his account at the IOR, concerns his transactions when he was official at the Administration for the Patrimony of the Apostolic See in 2009. In that period, Scarano allegedly took €560,000 in cash out of his personal IOR account in the Vatican and brought them into Italy to pay a mortgage on his Salerno home.

In order to do so without raising suspicion, the cleric asked 56 close friends to accept €10,000 apiece in cash in exchange for a cheque or money transfer in the same account.

Scarano was able to raise such a large amount of money thanks to donors who thought they were funding a home for the terminally ill in Salerno. The donors had "enormous" wealth and trusted Scarano's charitable efforts.

The development came days after Pope Francis set up a commission of inquiry into the Vatican bank. On Wednesday, he asked five people to head a commission of inquiry into the Vatican bank's activities and legal status "to allow for a better harmonisation with the universal mission of the Apostolic See," according to the legal document he signed creating it.

The Vatican spokesman, the Rev. Federico Lombardi, said earlier this week that the Vatican is taking the appropriate measures to deal with Scarano's case. The Pope has made clear he has no tolerance for corruption or Vatican officials using their jobs for personal ambition or gain.