The Associated Press reported today that the Vatican expressed “astonishment” when an Italian court rejected the release of Vatican bank funds seized by authorities for failing to comply with international money laundering laws.
Prosecutors claim that the $30 million seizure that occurred last month is due to non-disclosure of the transfer destination of large sums of money. Although the Vatican bank — Institute for Works of Religion — vows that it is working within international banking rules, the prosecutor found “exactly the opposite” was true. The AP reported:
Under the investigation, financial police seized the money Sept. 21 from a Vatican bank account at the Rome branch of Credito Artigiano Spa, after the bank informed the Bank of Italy about possible violations of anti-money laundering norms. The bulk of the money, euro20 million ($26 million), was destined for JP Morgan in Frankfurt, with the remainder going to Banca del Fucino.
The prosecutors’ document suggests confirmation of Italian press reports that the probe was widening, looking into possible violations in earlier years linked to Italian corruption, in addition to the two most recent cases.
The document cites suspicious transactions involving checks drawn from a Vatican bank account at Unicredit bank in 2009, involving the use of a false name.
The prosecutors also cited a euro650,000 withdrawal from a Vatican ban account at Intesa San Paolo bank where the Vatican didn’t specify the money’s ultimate destination despite a specific request by the Italian bank.
The prosecutors called this “a deliberate failure to observe the anti-laundering laws with the aim of hiding the ownership, destination and origin of the capital.” The Italian banks have declined comment.
This is not the first major banking fraud case involving the Vatican. They were involved in one of the largest banking fraud cases in Italy following the mysterious 1980s collapse of Banco Ambrosiano, a scandal that was shrouded in murder and deceit, where:
Banco Ambrosiano collapsed following the disappearance of $1.3 billion in loans the bank had made to several dummy companies in Latin America. The Vatican had provided letters of credit for the loans.
While denying any wrongdoing, the Vatican bank agreed to pay $250 million to Ambrosiano’s creditors.
It appears that this new Catholic Church banking fraud scandal is not unusual for the Vatican, and probably a welcome distraction from sex scandals. In the end, a modest fine will likely be paid, or perhaps a low-level paper pusher will be sacrificed to the authorities. Such is the modern justice for large institutional sinners.
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