A high-ranking Vatican official and two others have been arrested on suspicion of financial fraud at the Institute of Religious Works (IOR), the Holy See’s scandal-tainted bank, Italian authorities said on Friday.

Monsignor Nunzio Scarano — who had wrongly been identified as a bishop in earlier media reports — is accused of corruption, fraud and slander along with Giovanni Maria Zito, a former intelligence officer, and Giovanni Carinzo, a financial broker. They are all Italian.

According to Rome prosecutors, Mr. Scarano paid Mr. Zito 400,000 euros (523,000 dollars) to transport 20 million euros in cash from Switzerland to Italy on board a jet. The money belonged to a family friend.

The prelate’s lawyer, Silverio Sica, told the SkyTG24 news channel that Mr. Scarano had “tried to help friends that were important to him, who had suffered a loss,” and ruled out that he had made any personal gains.

The monsignor had been placed under investigation earlier this month for alleged money laundering in his home town of Salerno, southern Italy, and was suspended from his accounting role at Administration of the Patrimony of the Apostolic See (APSA) — the Holy See’s central bank.

News of the arrests came two days after Pope Francis announced that he had set up a five-member investigative panel to look into the activities of the IOR.

In its 71-year history, the bank has been linked to fraud and money laundering several times, and is still under investigation by Italian magistrates. However, it has tried to clean up its act in recent years.

In 2012, inspectors from the Moneyval committee of the Council of Europe said the Vatican had come a long way on financial transparency, but criticised the lack of independent supervision over the IOR.

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