Vatican cleric Scarano charged with money-laundering

Monsignor Nunzio Scarano spent two decades working as a Vatican accountant

A senior Italian cleric has been charged with laundering millions through the Vatican bank, police say.

Monsignor Nunzio Scarano is already on trial and under house arrest on separate charges of plotting to smuggle 20m euros ($26m; £17m) into Italy.

The former Vatican accountant and two other people were served with arrest warrants on Tuesday, police said.

Last year, Pope Francis set up a commission to review the bank's activities after a series of scandals.

Traditionally the Vatican has opposed the right of the Italian judiciary to investigate alleged crimes committed by its officials on the grounds of diplomatic immunity and privilege, reports the BBC's David Willey in Rome.

But under Pope Francis, increased cooperation between the Vatican and Italian authorities led to the arrest of Monsignor Scarano last summer, our correspondent says.

'False donations'

On Tuesday, police seized some 6.5m euros in bank accounts and real estate, including Monsignor Scarano's luxury apartment in the southern city of Salerno.

Authorities said the latest charges against the cleric related to "false donations", which he allegedly recycled from offshore accounts through the Vatican bank.

Prosecutors allege that Monsignor Scarano got dozens of people to make contributions to a home for the terminally ill in Salerno, and used the money to pay off a mortgage on one of his properties.

Another Catholic priest has also been arrested on charges of laundering and making false statements, officials say.

The Vatican bank is one of the world's most secretive financial institutions

Monsignor Scarano worked for two decades as a senior accountant in a Vatican department known as Apsa (the Administration of the Patrimony of the Apostolic See).

The division manages the Vatican's real estate holdings and stock portfolios.

The cleric was suspended from his position last year, after he was accused of conspiring to smuggle millions from Switzerland into Italy with the help of a secret service agent and a financial broker.

The trio's high-profile trial began in early December in Rome.

Officially known as the Institute for the Works of Religion (IOR), the Vatican bank is one of the world's most secretive. It has 114 employees and 5.4bn euros of assets.

The bank is undergoing a major restructuring on the orders of Pope Francis.

He has hired an American financial services company to examine all 19,000 accounts to ensure that international rules against money laundering are being correctly observed.