VATICAN CITY (AP) - The troubled Vatican bank says it is cooperating with Italian investigators who arrested a Vatican official over an alleged plot to bring 20 million euros ($26 million) into Italy from Switzerland illegally.
Monsignor Nunzio Scarano, a recently suspended accountant in one of the Vatican's main finance departments, was arrested early Friday along with a secret service agent and a financier.
Vatican bank spokesman Max Hohenberg said the bank was cooperating and that its board had launched an internal investigation.
Monsignor Nunzio Scarano, already under investigation in a purported money-laundering plot involving the Vatican bank, is accused of fraud, corruption and slander stemming from the plot, which never got off the ground, attorney Silverio Sica told The Associated Press.
It was the latest financial scandal to hit the Vatican and came just two days after Pope Francis created a commission of inquiry into the Vatican bank to get to the bottom of the problems that have plagued it for decades and contributed to damaging the Vatican's reputation.
Sica said Scarano was a middleman in the Swiss operation. Friends had asked him to intervene with a broker, Giovanni Carenzio, to return 20 million euros they had given him to invest. Sica said Scarano persuaded Carenzio to return the money, and an Italian secret service agent, Giovanni Maria Zito, went to Switzerland to bring the cash back aboard an Italian government aircraft. Such a move would presumably prevent any reporting of the money coming into Italy.
The operation failed because Carenzio reneged on the deal, Sica said.
Zito, nevertheless, demanded his 400,000 euro commission. Scarano paid him an initial 200,000 euros by check, Sica said. But in a bid to not have the second installment of the commission deposited, Scarano filed a report for a missing 200,000 check, even though he knew Zito had it, Sica said.
Carenzio and Zito also were arrested Wednesday along with Scarano, Sica said.
When asked how Scarano responded to the accusations, Sica said "I think that Don Nunzio will respond to the questions."
It's not the only troubles facing Scarano.
Prosecutors in the southern city of Salerno have placed him under investigation for alleged money-laundering stemming from his account at the Vatican's bank, called the Institute for Religious Works, or IOR.
The investigation concerns transactions Scarano, then an official at the Administration for the Patrimony of the Apostolic See, made in 2009 in which he took 560,000 euros ($729,000) in cash out of his personal IOR bank account and carried it out of the Vatican and into Italy to help pay off a mortgage on his Salerno home.
To deposit the money into an Italian bank account - and to prevent family members from finding out he had such a large chunk of cash - he asked 56 close friends to accept 10,000 euros apiece in cash in exchange for a check or money transfer in the same amount, Sica said earlier this week. Scarano was then able to deposit the amounts in his Italian account.
The original money came into Scarano's IOR account from donors who gave it to the prelate thinking they were funding a home for the terminally ill in Salerno, Sica said. He said the donors had "enormous" wealth and could offer such donations for his charitable efforts.
He said Scarano had given the names of the donors to prosecutors and insisted the origin of the money was clean, that the transactions didn't constitute money-laundering, and that he only took the money "temporarily" for his personal use.
The home for terminally ill hasn't been built, though the property has been identified, Sica said.
"He declares himself absolutely innocent," Sica said of the Salerno investigation.
The Vatican spokesman, the Rev. Federico Lombardi, told the AP earlier this week that the Vatican is taking the appropriate measures to deal with Scarano's case. There was no further comment Friday from the Vatican about Scarano's arrest.
Francis has made clear he has no tolerance for corruption or for Vatican officials who use their jobs for personal ambition or gain. He has said he wants a "poor" church and a church that is for the poor, one that goes out to the "peripheries" to minister to those most needy. He has also noted, tongue in cheek, that "St. Peter didn't have a bank account."
On Wednesday, he named five people to head a commission of inquiry into the Vatican bank's activities and legal status "to allow for a better harmonization with the universal mission of the Apostolic See," according to the legal document he signed creating it.
Two of them are Americans: Monsignor Peter Wells, the No. 3 official in the Vatican secretariat of state, and Mary Ann Glendon, a Harvard law professor, former U.S. ambassador to the Holy See and current president of a pontifical academy.
American cardinals were among the most vocal in demanding a wholesale reform of the Vatican bureaucracy - and the Vatican bank - in the meetings outlining the priorities for the new pope in the run-up to the March conclave that elected Francis. The demands were raised following revelations in leaked documents last year that told of dysfunction, petty turf wars and allegations of corruption in the Holy See's governance.
It was the second time in as many weeks that Francis had intervened to get information out of the IOR, a secretive institution best known for the scandals it has caused the Vatican. On June 15, he filled a key vacancy in the bank's governing structure, tapping a trusted prelate to be his eyes inside the bank.