A senior Catholic Cleric with connections to the Vatican was arrested for conspiring to assist wealthy friends in smuggling tens of millions of euros from Switzerland into Italy on Friday, according to Reuters.
An Italian secret service agent and a financial intermediary were arrested along with Monsignor Nunzio Scarano, 61.
The group had rented a private plane to transport the money from Locarno, in southern Italy, and used burner phones to communicate in implementing their plan to get the money past customs.
This incident comes as an embarrassing blemish for Pope Francis, who has renounced many of the extra frills and accouterments that come with the papal office, seeking to emphasize the importance of a simple life of devotional prayer.
Two days ago, the Vatican announced that he had set up a commission into the Vatican bank, which is formally known as the Institute for Works of Religion (IOR). It has suffered numerous scandals over the past decades.
Scarano plotted to take 40 million euros into Italy for a family of shipbuilders in Salerno, his hometown, according to Nello Rossi, a magistrate who spoke to reporters. Scarano was arrested in Rome and taken to Queen of Heaven jail.
Rossi is investigating the Vatican bank for money laundering. These arrests are a result of that investigation. Rossi and magistrate Stefano Pesci said they haven't found any indication that the bank was directly involved with the incident, but they are continuing to investigate and more searches are underway.
Scarano is also under a separate investigation in southern Italy regarding his accounts in the Vatican bank.
In July 2012, Scarano approached Giovanni Zito, a paramilitary Carabiniere policeman on loan to the secret service, to assist him in getting the money, located in a Swiss bank, into Italy while bypassing taxes and customs control.
Giovanni Carenzio, a financial broker with offices in Switzerland and the Canary Islands, was acting as the fiduciary for the owners of the money, earning him the third arrest.
It's unclear how the money ended up in Switzerland.
The three men changed their plans from the original idea of bringing back all 40 million euros in cash to only 20 million euros. They used a private plane, which flew to Locarno and waited a few days before returning to Rome without the money.
The men broke into disagreements, and as a result, the money never left Switzerland.
Had the theft gone as planned, Zito was going to use his position in the secret services to avoid customs controls. The plane would then have been met on the runway of an airport in Rome and the cash would have been transported with an armed escort to Scarano's home in Rome, according to Rossi.
Zito is demanding his payment for services from the military prison he is being held in. Scarano previously gave Zito two checks, for 400,000 euros and 200,000 euros. The first was cashed, but Scarano blocked the second one before Zito could cash it by filing a false report that it had been lost.
"We are trying to determine the origin of the vast amount of money that was at the disposal of Scarano, who is the holder of several accounts at IOR," Rossi said.
The Vatican is prepared to cooperate with the investigation, but hasn't yet received any request to do so, according to Father Federico Lombardi, a spokesman for the Vatican. The Vatican's' financial intelligence authority (FIA) is following the case and is prepared to take action if necessary.
"This is just a piece in a much larger mosaic," Rossi said.
Scarano has been accused of taking 560,000 euros out of his Vatican account in cash, money which had been donated for the terminally ill, and distributing various amounts to friends who then gave him checks in exchange, which Scarano then used to pay off his mortgage.
"Scarano was able to use the bank for his personal reasons," Rossi said.
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