VATICAN CITY - A Vatican monsignor already on trial on accusations of plotting to smuggle about $26 million from Switzerland to Italy was arrested Tuesday in a separate case on charges of using his Vatican bank accounts to launder money.
Financial police in the southern Italian city of Salerno said Monsignor Nunzio Scarano had transferred millions in fictitious donations from offshore companies through his accounts at the Vatican’s Institute for Religious Works.
Acting on evidence provided by the Vatican bank, police said they seized about $8.8 million in real estate and assets in Italian bank accounts Tuesday, including Scarano’s luxurious Salerno apartment, filled with gilt-framed oil paintings, ceramic vases and other fancy antiques.
A priest in Salerno also was placed under house arrest and a notary public was suspended over involvement in the money laundering plot. Police said in all, 52 people were under investigation.
Scarano’s lawyer, Silverio Sica, said his client merely took donations from people he thought were acting in good faith to fund a home for the terminally ill. He conceded, however, that Scarano used the money to pay off a mortgage.
“We continue to strongly maintain the good faith of Don Nunzio Scarano and his absolute certainty that the money came from legitimate donations,” Sica said.
The Salerno investigation was already underway when Scarano was arrested in June in Rome on the smuggling accusations.
Police and Sica have said the money involved in both the Swiss smuggling case and the Salerno money-laundering case originated with one of Italy’s most important shipping families, the D’Amicos. On Tuesday, financial police said more than $6.8 million had been made available to Scarano by the D’Amicos via offshore companies.
Police and Sica described the laundering plot as follows: Scarano purportedly withdrew about $752,000 from his Vatican account in cash in 2009 and took it into Italy. Because he couldn’t deposit it in an Italian bank without drawing suspicion, he selected 50 friends to accept about $13,550 apiece in cash in exchange for a check or wire transfer in that same amount.
The money then went to pay off a mortgage on a Salerno property held in the name of a company Scarano partly owned.
In a July 1 statement, the D’Amico family of Salerno denied its involvement. The family’s communications firm did not immediately respond to a request seeking new comment Tuesday. No one in the family has been arrested in either case.
Scarano was fired from his job as an accountant in the Vatican’s main financial office, and Vatican prosecutors seized the $3.12 million still in his accounts after his arrest.
The Vatican’s top prosecutor said last week that the Holy See had responded to two official requests from Italy for information about Scarano’s accounts, while making its own request to Italian authorities for help in its own money-laundering investigation against the prelate.
Salerno prosecutor Elena Guarino had praise for how the bank, known as the IOR, had provided evidence against Scarano. The bank had previously reported to its financial regulators that a 10-year analysis of Scarano’s bank account activity showed about $9.5 million had moved in and out of the accounts in his name.
“The IOR opened its doors,” she said. “They gave us ample and immediate cooperation without any type of insistence.”
It was an unusual acknowledgment by Italian prosecutors of the Vatican’s cooperation in cross-border legal affairs after years of tensions over Italian accusations that the Vatican bank was essentially an offshore tax haven for well-connected Italians.
Vatican spokesman the Rev. Federico Lombardi similarly praised the development as “fruit of the collaboration” between Vatican and Italian investigators, though he noted that Italian investigators didn’t physically take evidence from the bank’s premises.
Scarano’s original arrest in June led to the resignations of the Vatican bank’s top two managers and accelerated efforts to make the institute conform to international antimoney-laundering norms.
Pope Francis has made overhauling the bank a priority and has named a fact finding commission to look into its activities and legal structure.
Scarano’s initial arrest in the smuggling case was reduced to house arrest because of his ailing health. Sica said the prelate would serve the new arrest warrant also under house arrest.
In the Rome smuggling case, prosecutors say Scarano, a financier and a carabinieri officer devised an elaborate plot to transport about $27 million in a private jet from Switzerland to Italy to avoid paying customs duties. The plot fell apart because the financier reneged at the last minute.
Sica has said Scarano in that case was merely acting as a middleman.
Business, Pages 23 on 01/22/2014