Italy: Vatican Bank Being Investigated For Money Laundering

An Italian newsweekly is reporting that the Vatican Bank is being investigated for a $300M money laundering scheme involving one of Italy's largest banks.

Panorama reports that officials from the Bank of Italy’s Financial Intelligence Unit (UIF) have identified transactions worth up to €180 million (£160 million) that allegedly violated anti-money-laundering regulations in accounts held at a UniCredit branch in Via della Conciliazione, next to St Peter’s Basilica. Prosecutors in Rome, led by Nello Rossi and Stefano Rocco Fava, are reported to be working with a special unit of the Guardia di Finanza, the Italian tax police, to investigate the bank — which is formally known as the Institute for Religious Works (IOR).

The investigation relates to alleged breaches of financial regulations and disclosure obligations at the branch, but it is possible that the investigation may be broadened to include accounts held at other Italian banks. Investigators are examining every transaction in accounts held by the IOR from 2006 to 2008, the magazine reported. In that period, it said that more than €180 million in cheques and transfers moved through the accounts. The magazine named a manager at the branch who it claimed had a close relationship with Lelio Scaletti, a former director of the IOR, who left the Vatican Bank in October 2007. This is the most serious investigation of the Vatican Bank since the 1982 collapse of Banco Ambrosiano, in which it was the major shareholder. Ambrosiano collapsed with the Vatican held partly responsible for $1.3 billion in bad debts. If the latest allegations are proved to be correct, they would be a blow for the new directors of the IOR, appointed two months ago by Tarcisio Bertone, Vatican Secretary of State.

According to the above-linked story, the Vatican Bank may argue that they are outside the jurisdiction of Italian courts.

(Tipped by JMG reader Jimmy)