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Police seize £25m from Vatican bank

Italian authorities have seized £25 million from a Vatican bank account and said they have opened an investigation into top officials of the Vatican bank in connection with a money-laundering probe.

The Vatican said it was "perplexed and surprised" by the investigation.

Italian financial police seized the money as a precaution and prosecutors placed the Vatican bank's director general and its chairman under investigation for alleged mistakes linked to violations of Italy's anti-laundering laws, news reports said.

The probe is not the first time the bank - formally known as the Institute for Works of Religion - has faced trouble. In the 1980s, it was involved in a major scandal that resulted in a banker, dubbed "God's Banker" because of his close ties to the Vatican, being found hanging from Blackfriars Bridge in London.

The Vatican expressed full trust in the chairman of the bank, Ettore Gotti Tedeschi, and his director-general, and said it had been working for some time to make its finances more transparent to comply with anti-terrorism and anti-money laundering regulations.

"The Holy See is perplexed and surprised by the initiatives of the Rome prosecutors, considering the data necessary is already available at the Bank of Italy," it said in a statement.

Police seized the money from a Vatican bank account at the Rome branch of Credito Artigiano Spa, according to news agencies ANSA and Apcom. The bulk of the money, was destined for JP Morgan in Frankfurt, with the remainder going to Banca del Fucino.

According to the reports, the Vatican bank had neglected to communicate to financial authorities where the money had come from. The reports stressed that Gotti Tedeschi was not being investigated for laundering money himself but for a series of alleged omissions in financial transactions.

Gotti Tedeschi was named chairman of the bank a year ago after serving as the head of Italian operations for Spain's Banco Santander. A member of the conservative religious movement Opus Dei, Gotti Tedeschi frequently speaks out on the need for more morality in financing and is a very public cheerleader of Pope Benedict XVI's finance-minded encyclical "Charity in Truth".

The Vatican bank, located in a tower just inside the gates of Vatican City, is not a typical bank. Its stated mission is to manage assets placed in its care that are destined for religious works or works of charity.

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