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Ex-Vatican prelate in new money-laundering probe

Scarano arrested last year over alleged money-smuggling bid

21 January, 16:50
Ex-Vatican prelate in new money-laundering probe (By Laura Clarke) (ANSA) - Rome, January 21 - Monsignor Nunzio Scarano, the former Vatican prelate arrested last year for allegedly trying to smuggle millions of euros into Italy, faced fresh legal trouble on Tuesday after being issued a new arrest warrant related to a separate money-laundering probe.

Scarano, the former head of analytic accounts at the Holy See's asset-management agency APSA, is being investigated for involvement in the laundering millions of euro through accounts at the powerful Institute for Religious Works (IOR), the Vatican Bank. The money, much of which investigators say came from offshore companies controlled by rich ship-builder friends, the Roman D'Amico family, was allegedly used to buy property, set up companies and pay off a mortgage.

Another priest, Father Luigi Noli, was also put under house arrest, while a notary, Bruno Frauenfelder, was temporarily banned from doing his job.

In total, 52 people have been placed under investigation in connection with the probe.

Meanwhile, IOR said Tuesday it had frozen all accounts linked to Scarano on the orders of a Vatican tribunal last July.

Scarano, from the port city of Salerno near Naples, was already under house arrest after being detained in June on suspicion of planning to elude customs with 20 million euros in cash for the D'Amico family.

He has denied charges that he conspired with a former Italian spy and a financial broker in a failed bid to bring the money from Switzerland to Italy.

On Tuesday the lawyer acting for Scarano said his client had fallen into "a state of depression" after receiving the new arrest warrant and that he would make a request for him to be visited by his psychiatrist. The Scarano probes are part of a wider investigation into alleged shady transactions at IOR, in which former president Ettore Gotti Tedeschi and his former No.2 were placed under investigation in connection with suspected money laundering.

Meanwhile, the bank has made a series of moves to show greater transparency since Argentinian Jesuit bishop Jorge Mario Bergoglio became Pope Francis in March, succeeding Benedict XVI, the first pontiff to voluntarily abdicate in 700 years.

As a new broom with a reputation for plain talking, Francis is reportedly keen to remove stains from IOR's reputation and get it onto the 'white list' of countries with strong credentials on combatting financial crime.

In December the Council of Europe's Moneyval agency, a monitoring group of financial experts, praised the Vatican's progress, but it also stressed that more work needed to be done.