Senior Catholic cleric Monsignor Nunzio Scarano is under house arrest for laundering 20 million euros ($26 million) through the Vatican bank.
Scarano was arrested last summer and is now serving trial along with two former Vatican accounts and two others involved in the scheme.
Vatican, Italian, and American investigators are working on unearthing the extent of Scarano’s smuggling. Police seized 6.5 million euros in bank accounts and real estate—including Scarano’s luxury apartment, complete with gilt-framed paintings and ceramic vases. Authorities are also alleging a “false donations” scheme, in which Scarano solicited donations for a home for the terminally ill in Salerno—and then used them to pay off his apartment mortgage.
Scarano, who is reportedly nicknamed “Monsignor 500” for the bills he favors, transferred the fake donations from offshore companies into his accounts at the Vatican’s Institute for Religious Works.
Scarano's lawyer, Silverio Sica, admitted that Scarano used the money to pay off his mortgage, but says that Scarano didn’t take donations from questionable sources.
"We continue to strongly maintain the good faith of Don Nunzio Scarano and his absolute certainty that the money came from legitimate donations," Sica told the Associated Press.
Investigators are also looking into a 20 million euro smuggling scheme that fell apart at the last minute when the financier that Scarano enlisted to help backed out. Scarano was suspended from his position when those allegations came out last year.
Pope Francis has made it his mission to reform the corrupt Vatican bank. While the Vatican traditionally claims diplomatic immunity from investigation by Italian law enforcement, the pope has increased cooperation between the two authoritative bodies, according to BBC’s Rome correspondent. Scandals in the bank last year led Pope Francis to set up a commission to review its activities.
An American financial services team hired by Pope Francis is looking into 19,000 Vatican accounts to make sure they comply with international rules.