Tuesday, October 27, 2020

Pope Francis appoints new chief to head Vatican’s anti-money laundering unit amid corruption scandal

-

Pope Francis has tapped a Bank of Italy executive to take over the Vatican’s financial intelligence unit following a scandal that resulted in the Vatican being suspended from an international anti-money laundering network.

Carmelo Barbagallo has been head of the Italian central bank’s vigilance unit since 2014, and until earlier this year, a consultant.

He replaces Rene Bruelhart, who was removed following an Oct. 1 raid on the AIF headquarters as part of a corruption investigation by Vatican prosecutors into a London real estate venture. Following the raid and seizure of documents, the Egmont Group of some 160 financial intelligence units suspended the Vatican from its secure communications network because the Vatican could no longer ensure its data would be kept confidential and secure.

The scandal has raised questions once again about the Vatican’s murky finances, after it worked for a decade to erase its reputation as a financial pariah and offshore tax haven.

- Advertisement -

Vatican prosecutors are investigating allegations of corruption in the secretariat of state’s 2012 purchase of a stake in a luxury residence in London. The Vatican bought the other investors out at the end of 2018, but then realized it had taken on an onerous mortgage as well as Italian middlemen who were fleecing the Holy See of tens of millions of euros in fees.

The AIF got involved only in March 2019, after the deal was closed, when the No. 2 in the secretariat of state, Monsignor Edgar Pena Parra, filed a suspicious transaction report with the AIF that triggered the start of a five-nation intelligence investigation to trace the financial flows from the deal to try to nab the culprits who had defrauded the Vatican.

It appears Vatican prosecutors didn’t realize that the AIF was in the middle of its own international investigation alongside counterparts in Britain, Italy, Switzerland, Luxembourg and Jersey when they raided AIF headquarters, suspended the AIF director Tommaso di Ruzza and essentially torpedoed the AIF intelligence investigation he had launched, these officials said, speaking on condition of anonymity.

Prosecutors acted after the Vatican bank, which is regulated by AIF, filed a complaint in the summer of 2019 alleging the whole operation looked suspicious after Pena asked it for a 150 million euro loan to extinguish the mortgage.

- Advertisement -

Francis referred to the scandal in his press conference Tuesday, defending the raid, downplaying the significance of Egmont and saying the in-house reports that triggered the investigation showed that the Vatican’s financial reforms are working.

He also said that based on evidence Vatican prosecutors had, it appeared that the AIF had failed in its duty to “exercise control over the crimes of others,” apparently referring to the secretariat of state’s decision to enter into a real estate deal with shady characters.

The raid, Bruelhart’s removal and the Egmont suspension prompted two of the remaining four members of AIF’s board to resign, including Juan Zarate, a former U.S. deputy national security adviser for combating terrorism and a former assistant Treasury secretary for terror financing and financial crimes.

In U.S. terms, a rough analogy would involve the FBI raiding the Federal Reserve and the Treasury Department’s financial crimes unit, seizing all their documentation without any communication with their leadership, based on a complaint lodged by one of the banks under their control.

MUST READ

Julius Baer to deny two former CEOs their bonuses over money laundering scandal

Julius Baer will withhold millions of francs in bonuses from its former chief executives Boris Collardi and Bernhard Hodler, as a result of a...

Goldman Sachs executives to cover part payments of $3 billion fines in 1MDB scandal

Nine current or former Goldman Sachs executives, including CEO David Solomon, will have to pay back hundreds of millions of dollars in compensation over...

Goldman Sachs agrees $3 billion settlement with US DoJ over 1MDB corruption scandal

Goldman Sachs has agreed to pay nearly $3bn (£2.3bn) in the US to end a probe of its role in Malaysia's 1MDB corruption scandal. The...

Hong Kong fines Goldman Sachs $350 million over 1MDB scandal

Goldman Sachs ignored multiple red flags over the multibillion-dollar fundraisings it arranged for state fund 1Malaysia Development Berhad, Hong Kong’s financial regulator said on...

Texas attorney general Ken Paxton fires top aide who accused him of bribery

Lacey Mase, one of the top aides who accused Texas Attorney General Ken Paxton of crimes including bribery and abuse of office, has been fired, she told The...

Subscribe For More

Get our daily notification on the latest financial crimes news around the World

Advertisement
Advertisement

Latest News

This Week

US financial watchdog fines bitcoin mixer operator $60m for money laundering

The founder and operator of some of the first "mixing" services in crypto will have to cough up $60 million to United States regulators,...

Bribery trial of former San Angelo police chief Tim Vasquez delayed until 2021

The trial of former San Angelo police chief Tim Vasquez will not happen until 2021, according to court documents. The trial, originally set for...

Goldman Sachs agrees $3 billion settlement with US DoJ over 1MDB corruption scandal

Goldman Sachs has agreed to pay nearly $3bn (£2.3bn) in the US to end a probe of its role in Malaysia's 1MDB corruption scandal. The...

Swiss court upholds money-laundering conviction of ex-Ukrainian lawmaker Martynenko

A Swiss court has upheld the conviction of former Ukrainian lawmaker Mykola Martynenko for laundering via Swiss banks millions of dollars worth of kickbacks...
Advertisement

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks