Italian court lifts Torzi restrictions in setback for Vatican prosecutors

News: Vatican finances

Italy’s highest appeals court has lifted court-ordered financial restrictions on Gianluigi Torzi, the broker at the center of the Vatican financial scandal, according to the businessman’s lawyers. 

The Oct. 13 decision is believed to have unfrozen some of Torzi’s assets, and lifted restrictions on Torzi’s business activities. While the Associated Press said Wednesday the lifting of the order includes cancelling a warrant for Torzi’s arrest, Torzi’s attorney did not indicate the extent of the order.

The businessman is currently facing extradition proceedings in the UK. 

The charges against Torzi will now be re-examined by a lower court, according to AP.

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In a statement circulated to media on Tuesday, Tozi’s lawyers said that Italy’s Court of Cassation removed “precautionary measures” placed on Torzi by a Roman court earlier this year after an Italian magistrate issued a warrant for his arrest in April. 

Italian prosecutors filed for Torzi’s arrest in April, in connection to Vatican charges against Torzi of money laundering, extortion, and fraud over the Secretariat of State’s purchase of a London building in 2018. Italian authorities added the allegation that Torzi falsified invoices worth millions of euros for non-existent transactions and used several of his companies for tax evasion.

Italian prosecutors requested in April that a court impose “precautionary measures” against Torzi — an Italian legal maneuver that ordinarily freezes assets, and limits business activity,

A Roman magistrate imposed a precautionary order against Torzi, though its exact limitations have not been made public. Torzi appealed the order to Italy’s Court of Review, which upheld the measures. The Court of Cassation, which reportedly threw out the freeze order on Wednesday, is the highest appeals court in the country.

The Court of Cassation’s decision, and details of the now-lifted precautionary measures, are expected to be published in the coming weeks, but it is understood that the court’s ruling does not dismiss the charges brought against Torzi. However, his lawyers called the decision “an important step in proving the innocence of” their client.

Measures have also been imposed against several of Torzi’s business associates, and against companies through which he is alleged to have funneled millions of euros as a tax dodge -- including more than 15 million euros he received from the Vatican in exchange for control of the London building.

The court’s mirrors a March decision by a UK court, in which a British judge lifted a freeze order against Torzi, which had been imposed at the request of Vatican prosecutors. 

In the UK decision, Judge Tony Baumgartner highlighted procedural flaws and contradictory arguments in the Vatican’s case. He noted that the aspects of the London property deal over which Torzi is accused of fraud and extortion had been specifically approved by senior Vatican officials.

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The Italian decision is the latest setback for Vatican prosecutors, who have come under criticism during the opening phase of the Vatican trial. 

Defense attorneys argue prosecutors made a range of procedural missteps, and failed to turn over evidence to defense lawyers. Last week, prosecutors offered to restart their investigation into some of the charges against 10 individuals currently on trial in the city-state. While the trial’s judge ordered some new interrogations, he also set a date for the trial’s next hearing.

Torzi was first arrested in June, 2020, by Vatican authorities and charged in the Vatican City State with extortion, money laundering, fraud, and embezzlement for his role in the London property scandal. 

After ten days in Vatican custody, Torzi was released after he agreed to post a 3 million euro bond to an escrow account at the IOR. While Torzi was released from jail, the money never actually arrived.

The Vatican financial scandal trial will resume in a Vatican courtroom on Nov. 17. Torzi, still in London and facing the prospect of arrest in Italy, is not expected to attend.

This story has been updated.