Vatican freezes funds of cleric in money smuggling case

Fri Jul 12, 2013 11:48am EDT
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By James Mackenzie

ROME (Reuters) - The Vatican said on Friday it had frozen funds belonging to a senior cleric at the center of a suspected money smuggling operation, and could open investigations into other individuals.

Monsignor Nunzio Scarano, who has close links to the Vatican bank, was arrested last month, accused of plotting to bring millions of euros in cash into Italy from Switzerland for rich friends.

Scarano's lawyer said his client, who is currently being held in Rome's Queen of Heaven jail, was prepared to cooperate fully with investigators. "Scarano is in a position to clear up everything," he said.

Although the Vatican bank has not been directly implicated itself in the case, it has been under heavy pressure following a long series of scandals and growing criticism for its persistent failure to meet international transparency standards.

Two top directors have resigned in the wake of the case and Pope Francis has appointed a special committee of inquiry to get to grips with the problems at the bank, known formally as the Institute for Works of Religion (IOR).

Scarano, a former senior accountant in APSA, the Holy See's financial administration, has been accused of trying to smuggle 20 million euros ($26 million) past customs on behalf of a family of rich ship owners from his home town of Salerno.

He was arrested last month with Giovanni Zito, an Italian secret service agent, and financial broker Giovanni Carenzio.

A Vatican statement said the chief judicial official of the tiny city state had ordered his accounts in the Vatican Bank to be frozen while checks are carried out. It said the investigation could be extended to other individuals.   Continued...

A man sheltering under an umbrella is reflected in a puddle at Saint Peter's Square as the conclave begins in order to elect a successor to Pope Benedict, at the Vatican March 12, 2013. REUTERS/Eric Gaillard