Everyone in Nunzio Scarano’s inner circle referred to him as Monsignor 500 because he always carried £500, or about $650, in cash under his cassocks, though few apparently knew where it came from. The Vatican accountant who had worked the books in the office of the Patrimony of the Apostolic See was arrested on Friday along with his financial broker Giovanni Carinzo and Italian secret-service agent Giovanni Maria Zito after Italian financial police discovered an intricate plot allegedly devised by the trio to sneak about $26.2 million from secret Swiss bank accounts into a yet unnamed Italian bank.
Scarano had been suspended from his Vatican duties earlier this month, when he was formally advised he was under investigation in the southern city of Salerno for other unholy business, including allegedly withdrawing more than $650,000 in cash from his Vatican bank account that was funded by donations for his parish and using it to pay off personal debts. He allegedly convinced 50 of his friends to roll about $13,000 apiece in cash into cashier’s checks to make for easy movement between his personal accounts under the tax-police radar.
The monsignor’s arrest comes just two days after Pope Francis installed an eight-member commission of prelates to begin the tedious work of reforming the Vatican bank, known officially as the Institute for the Works of Religion or, in Italian, IOR. The team of reformers, including two Americans, has been tasked with tidying the bank’s messy financial affairs. The IOR has been chastised by the European Union for its banking practices, and the Vatican even lost credit-card capabilities last year after refusing to comply with international money-laundering practices.
Scarano’s arrest, however, is not the papal team’s handiwork but the product of the Italian authorities’ ongoing investigation into the Vatican’s banking practices. If indicted, Scarano and his partners in crime will be tried in an Italian court, potentially exposing embarrassing Vatican secrets, especially if Scarano’s business partners included other Vatican officials. Scarano is being held in custody after being arrested in a church on the outskirts of Rome.
Zito, the Italian secret-service agent, was reportedly paid to shuttle the cash from Switzerland to Italy. The Swiss cash belonged to members of an Italian family of shipping magnates who wanted to repatriate the funds without paying taxes. Scarano and the spy allegedly devised the plan for a sizable fee from the shippers. Zito allegedly charged Scarano and his financial broker, who helped handle the details, a sum of about $520,000 for the transfer, half of which Scarano allegedly paid him by check, which he later tried to cancel by reporting that Zito stole the check, tipping authorities to the potential crime in action. Zito, whom Scarano was seemingly trying to implicate, reportedly is cooperating with authorities, which may lead to further arrests and which certainly will not be favorable to Scarano’s case.
The initial investigation into Scarano’s alleged Salerno wrongdoings is ongoing. In that case, he raised funds by asking for donations to build a home for terminally ill patients and allegedly kept the cash in his Vatican bank account. By withdrawing the money and allegedly using those funds to pay personal debts, which reportedly include housing costs and even gambling debts, he may face further charges.
Even though Scarano’s arrest has little to do with the Vatican’s internal investigation, it comes at a good moment for the Vatican under Pope Francis, who has vowed to reform the Holy See and rid it of corruption. And if Scarano’s arrest exposes top ranking Vatican officials’ involvement, it will only help the pope’s cause.