Vatican Bank Launders Money and Aids Crime?

December 14, 2010 Taxation in Italy

RomeThe Vatican Bank has once again been embroiled in scandal with arising allegations of money laundering and connections to criminal activity.

On December 12th court documents came to light detailing new money-laundering allegations against the Institute for Religious Works (IRW), otherwise known as the Vatican Bank. Italian prosecutors are claiming that the bank has repeatedly and deliberately ignored EU rules against money laundering, and even aided the Italian Mafia.

The IRW was mired by money-laundering allegations as recently as September when a series of allegedly illicit transactions led authorities to seize nearly EUR 23 million of the bank’s assets and accounts. The bank allegedly attempted to transfer the money without providing legally mandated details on its origin and destination. It was later discovered that the transfer were intended to reach one of the subsidiaries JP Morgan in Frankfurt am Main. The actions were seen as being tantamount to money laundering.

The bank has since maintained that the entire scandal was merely a misunderstanding stemming from an innocent mistakes in record-keeping, and that matters will be righted shortly. However, the recently revealed court documents show that the bank has repeatedly committed similar offenses, with prosecutors saying that the IRW has acted “with the aim of hiding the ownership, destination and origin of the capital.” According to the newly published documents, in 2009 the IRW carried out a high-value transaction while providing a false name in the associated documentation. Later, in 2010, the Vatican Bank withdrew EUR 650 000 from another Italian bank, while flaunting EU laws mandating that the fund’s destination be disclosed.

Photo by Juan Rubiano