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Accusations of embezzling and laundering €50 million have resulted in a former Vatican bank president and his lawyer being ordered to stand trial.
The Vatican says the bank’s former president, Angelo Caloia, is the highest-ranking Holy See financial official to be indicted on such charges.
Seventy-eight year-old Coloia, along with his lawyer, 94 year-old Gabriele Liuzzo, denied any wrongdoing.
A third person who was under investigation, former director general Lelio Scaletti, died several years ago.
The bank (officially known as the Institute for Works of Religion) alleges “unlawful conduct” by the three occurred from 2001 to 2008. This period involved “the disposal of a considerable part of the institute’s real estate assets.”
In December 2014, Reuters reported the Vatican’s top prosecutor, Gian Piero Milano, had frozen millions of dollars in accounts held by the three men.
Milano says the men regularly under-represented the proceeds from real estate sales in the Vatican bank’s official books.
They allegedly received the difference between the real sale prices and the amount officially recorded separately.
Milano’s order which froze the assets says the trio often received the money from the real estate sales in cash.
He claims some of the proceeds were deposited in a Rome bank account that was not registered on the IOR’s balance sheet.
The bank’s internal investigation into the alleged scam begun in 2013 by then-president Ernst von Freyberg, a German businessman.
Freyberg, who was president until 2014, commissioned an independent audit of the sale of properties formerly owned by the bank.
His misgivings were aroused after noting suspicious accounting procedures under the Coloia and Scaletti administrations.
Freyberg then began an overhaul of the bank, which had been implicated in numerous financial scandals.
Thousands of accounts were closed.
Last year Italy put the Vatican on its“white list” of states with cooperative financial institutions.
This ended years of mistrust, providing an endorsement of Pope Francis’s efforts to clean up finances.
Moneyval, the Council of Europe’s monitoring body, has said in several evaluations the Vatican has made great strides in cleaning up the IOR and other financial departments.
At the same time, Moneyval says the Vatican still needs to be more aggressive in bringing cases to trial.
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