The papal gendarmerie and Italian police have foiled a massive potential fraud at the Vatican bank after two men stopped at the gates to the Vatican were found to be carrying a case containing large amounts of forged bearer bonds, Italian police say.
Lt Col Davide Cardia of the financial police said the would-be swindlers, who were wearing business suits, tried to convince Swiss Guards at a Vatican City gate this month that cardinals were expecting them.
Cardia told the Associated Press in a phone interview that the suspects, a middle-aged Dutchman and a US citizen, were detained after rapid checks by Vatican officials showed they had no such appointment nor any connections with the Institute for Religious Works (IOR), the formal name of the bank, which is behind the tiny city-state's walls and is not open to the public.
According to the reports, the line of credit would have been used to make investments on international capital markets.
But, although commonly described as a bank, the IOR does not engage in lending – and certainly not on the scale apparently envisaged by the two men who were apprehended. A source close to the Vatican said the bonds were for a total of €1.2bn (£1bn).
The institute's first-ever annual report, published last October, shows that at the end of 2012 "loans and advances to customers" amounted to less than €26m out of total assets of almost €5bn.
Under the treaty that governs relations between Italy and the Vatican City state, the two men were handed over to Italy's revenue officers, the Guardia di Finanza, whose officers searched their hotel rooms in Rome. They were reported to have found, among other things, three passports issued in the Netherlands and Malaysia.
The IOR is struggling to emerge from more than 30 years of scandal. As part of its efforts to clean up its image, the institute announced last year that it was shutting down accounts that did not belong to either clerics or employees or pensioners of the Vatican City state.
