$30 Million Seized From Vatican Bank In Money Laundering Probe

Sep 22, 2010   

Italian monetary authorities have seized $30 million from a Vatican bank account and placed the Vatican Banks director general, Paolo Cipriani, and its chairman, Ettore Gotti Tedeschi, under investigation for possible violations of Italys anti-money laundering laws. Italian prosecutors have announced that the money was seized as a precaution until the investigation can be completed.

The investigation comes as the Italian government is implementing anti-money laundering directives issued by the European Union. The new measures, designed to prevent money laundering and the financing of terrorism, require all foreign banks operating in Italy, including those of the sovereign Vatican City, to provide detailed information about the origins of money transfers.

Authorities began their investigation after the Bank of Italy notified the Italian government of two suspicious transfers on September 6, 2010, from a Vatican bank account at a Rome branch of Credito Artigiano S.p.A., an Italian bank. The suspicious transactions involved the transfer of $26 million to an account held by the Vatican at a Frankfurt, Germany branch of J.P. Morgan, and a $4 million transfer directed to an account held at the Banca del Fucino in Rome. Authorities are investigating whether the Vatican Bank violated anti-money laundering regulations for failing to reveal to financial authorities where the money involved in the transfers came from.

This new investigation is not the first investigation of the Vatican Bank, formally known as the Institute for Religious Works, for potential money laundering violations. Last year, Italian authorities launched a broad investigation into Italian bank accounts that received transfers from the Vatican Bank. The Vatican Bank was also implicated in the 1980s in a money laundering scandal that lead to the collapse of Italys then largest private bank, Banco Ambrosiano. In the 1980s Banco Ambrosiano collapsed after the disappearance of $1.3 billion in loans to Latin American companies. Though the Vatican Bank denied any wrongdoing, it agreed to pay $250 million to Banco Ambrosiano creditors after the collapse.

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