Vatican Priest Dubbed "Don 500" Allegedly Plotted to Smuggle ?17million to "Help out Friends"

Daily Mail
July 1, 2013

http://www.dailymail.co.uk/news/article-2352716/Vatican-priest-dubbed-Don-500-plotted-smuggle-17million-help-friends.html

Monsignor Nunzio Scarano in Salerno, Italy who is under investigation for his role in a money-laundering plot involving the Vatican bank

A Vatican priest arrested in a ?17million smuggling plot has admitted he behaved wrongly but said he was only trying to help out friends.

Monsignor Nunzio Scarano, dubbed 'Don 500' because the 500 euro note is his favourite banknote, was questioned for three hours by Judge Barbara Callari.

His lawyer Silverio Sica said that Scarano is not well in prison and had asked for house arrest to await a decision on his fate, expected in a day or two.

Meanwhile, the director of the embattled Vatican bank and his deputy have resigned today following the latest developments in the broadening finance scandal.

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.'

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 from a Vatican account at a Rome bank. Neither has been charged and the money was eventually ordered released.

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

Vatican accountant Scarano was arrested on Friday with two others accused of plotting to smuggle 20million euros from a Swiss bank account into Italy by private jet without reporting it to customs.

It was the latest financial scandal to hit the Vatican and its embattled bank which has long been regarded as an offshore tax haven prone to scandal.

Mr Sica said Scarano 'recognised it wasn't legal,' but acted to help out his friends.

According to reports of phone tapped conversations, Scarano and two other men plotted to smuggle the cash which was being held in a Swiss bank account without declaring it to authorities at the airport.

In the end, the plot never transpired. One of the men reneged at the last minute saying he could not get the cash.

Monsignor Nunzio Scarano (pictured), as well as two other men, are also accused of corruption

The prosecution claim one of the two flew aboard a rented private jet to Lucerne, Switzerland in July 2012 to allegedly pick up the money but returned home empty-handed.

But he still demanded from Scarano his fee of 600,000 euros for the operation it is said.

Scarano allegedly gave him one cheque for 400,000 euros which he deposited.

He gave him a second for 200,000 euros, but in a bid to prevent it from being deposited, reported it as missing, the prosecutor said.

Scarano, as well as the other two, are also accused of corruption.

The Vatican bank, formerly known as the Institute for Religious Operas, inside the Vatican

If they are indicted and convicted, they could face up to five to six years in prison, prosecutors say.

Mr Sica acknowledged that story set out by prosecutors is true.

But he said the defence would contest the corruption accusation on technical grounds.

'We cannot deny the facts,' Mr Sica said.

'But for us, there aren't the technical reasons for the corruption accusation, and we believe that he did this to help out his friends.'

In addition to his Rome arrest, Scarano is also under investigation in the southern city of Salerno for alleged money-laundering stemming from a 560,000 euro cash withdrawal he made from his IOR charity account in 2009.

Mr Sica has said Scarano arranged complicated transactions with dozens of other people and eventually used the money to pay off a mortgage.

The group of five cardinals overseeing the IOR accepted the resignations of Cipriani and Tulli and tapped the IOR's current president, German financier and aristocrat Ernst von Freyberg, to serve as interim director, a Vatican statement said.

Von Freyberg, who was named IOR president in February following the ouster last year of Italian banker Ettore Gotti Tedeschi for incompetence, thanked Cipriani and Tulli for their years of work and said much progress has been made in recent years to bring greater transparency to the Vatican's finances.

'While we are grateful for what has been achieved, it is clear today that we need new leadership to increase the pace of this transformation process,' von Freyberg said in a statement.

Italian banker Rolando Marranci was named as acting deputy and another banking expert, Antonio Montaresi, has been brought into a new position as chief risk officer to help ensure the IOR complies with anti-money laundering and anti-terrorism norms.

The IOR's board has begun the process of finding a permanent director and deputy director, the statement said.

Pope Francis has ordered an inquiry into the activities of the Vatican bank after the accusations of corruption.

Francis named a commission to investigate the bank's legal structure and activities 'to allow for a better harmonization with the universal mission of the Apostolic See,' according to the legal document that created it.

It was the second time in as many weeks that Pope Francis has intervened to get information out of the Vatican bank.