Belfast Telegraph

Friday 31 October 2014

Vatican bank chief quits in scandal

Monsignor Nunzio Scarano has been accused of fraud (AP)

The director of the embattled Vatican bank and his deputy have resigned following the latest developments in a finance scandal that has already landed one Vatican monsignor in prison and added urgency to Pope Francis's reform efforts.

The Vatican said in a statement that Paolo Cipriani and his deputy Massimo Tulli stepped down "in the best interest of the institute and the Holy See".

Mr Cipriani, along with the bank's then-president, was placed under investigation by Rome prosecutors in 2010 for alleged violations of Italy's anti-money-laundering norms after financial police seized 23 million euro (£20 million) from a Vatican account at a Rome bank.

Neither has been charged and the money was eventually ordered to be released.

But the bank, known as the Institute for Religious Works, or IOR, has remained under the glare of prosecutors, and now Francis, amid fresh concerns it has been used as an offshore tax haven.

Last week, a Vatican accountant was arrested as part of Rome prosecutors' broadening investigation into the IOR.

Monsignor Nunzio Scarano is accused of corruption and slander in connection with a plot to smuggle 20 million euro into Italy from Switzerland without reporting it to customs officials.

Scarano, dubbed "Don 500" by the Italian media because of his purported favourite euro banknote, acknowledged under questioning that his behaviour was wrong but that he was only trying to help out friends.

According to wire-tapped phone conversations, Scarano was in touch regularly with both Mr Cipriani and Mr Tulli to get the required bank approval to move large amounts of cash into and out of his IOR accounts.

Scarano had two such accounts: a personal one and one called "Fondo Anziani" to receive charitable donations for projects to help the elderly, prosecutors say.

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