VATICAN CITY (CNS) — Summarizing efforts made in 2013 to improve transparency and compliance with international standards for financial operations, the Vatican bank confirmed that it conducted a “detailed investigation” of the accounts held by a monsignor arrested by Italian police for the second time Jan. 21.
Msgr. Nunzio Scarano was suspended in late May from his job as an accountant in the Vatican office overseeing property and investments. The Vatican suspended him when it learned that he was under criminal investigation in Italy.
Arrested June 28 and charged with fraud, corruption and slander in a case involving an alleged plot to bring 20 million euros ($25 million) in cash from Switzerland to Italy, he has been under house arrest. Msgr. Scarano was arrested again in late January on suspicion of money laundering and fraud in connection with claims that he gave people cash in exchange for checks marked as donations.
Another priest, Father Luigi Noli, who July 2 resigned his position as pastor of Sts. Philip and James parish in Palidoro, near Rome, also was arrested Jan. 21 in connection with the money-laundering investigation. Italian news reports said the arrest warrant was given to him at Msgr. Scarano’s home in Salerno, a city in southern Italy.
Jesuit Father Federico Lombardi, Vatican spokesman, said that in response to a formal judicial request from the Italian government, the Vatican tribunal had provided Italian investigators with information about Msgr. Scarano’s accounts at the Vatican bank.
A Vatican court ordered the accounts frozen July 9.
In a Jan. 22 statement, the Vatican’s Institute for the Works of Religion, as the Vatican bank is formally known, said the institute had “detailed internal investigation of the facts and circumstances of the accounts in question and submitted all findings to the competent Vatican authorities.”
The bank’s statement also outlined steps taken in the course of 2013 to implement what are considered best practices in risk management and to comply with new Vatican City legislation to counter money laundering and the financing of terrorism.
The institute updated its anti-money laundering handbook, which includes information about implementing the bank’s new internal system of rating the risk of its clients. The bank also expanded the amount of data employees are required to monitor, including “verification of identification, source of funds, transaction activity and overall customer risk profile,” it said.
At the end of 2012, according to figures released in October, the institute had about 18,900 customers. The Jan. 22 statement said that by the end of 2013, 55 percent of them — starting with “the larger and more active” accounts — had been screened. The bank expected to complete the process by mid-2014.
The Vatican has decided that the only individuals and entities entitled to an account at the institute are “Catholic institutions, clerics, employees or former employees of Vatican City State with salary and pension accounts, and embassies and diplomats accredited to the Holy See.”
Accounts that do not fit into one of those categories are being closed, the bank said. “This is an ongoing operational procedure that should not be confused with ending or suspending client relationships on the suspicion of infringement of anti-money laundering legislation,” which is the responsibility of Vatican law enforcement and its Financial Intelligence Authority.
Repeating figures published in October, the statement said the bank manages 6.3 billion euros ($8.4 billion) in third-party assets, which include deposits, assets held in custody and assets held under portfolio management agreements.