Torzi talks: Threats, blackmail, and prostitutes feature in UK court ruling on Vatican finance
News: Vatican finances
|The Pillar||Mar 24||19|
A UK judge has lifted a court order against Gianluigi Torzi, the businessman arrested in the Vatican in 2020 and charged with extortion, money laundering, fraud, and embezzlement in connection with the Vatican’s purchase of a London property.
The full text of that decision, which has been obtained by The Pillar, sheds new light on the Vatican’s case against both Torzi and Vatican officials, and raises questions about the independence of the Vatican’s investigation.
The judgment details a series of errors, and a failure to produce evidence, by Vatican prosecutors. Some of the evidence Vatican prosecutors did not present to the court has already been discovered by the media, but it is unclear why prosecutors were unable or unwilling to use it in court.
The UK court notes that senior Vatican officials at the Secretariat of State, including Cardinal Pietro Parolin, may have personally authorized a transaction that was later described as “fraudulent” by Vatican prosecutors, and “opaque” by Parolin himself.
Torzi has said that Fabrizio Tirabassi, a lay official of the Secretariat of State, bragged about blackmailing senior Vatican prelates, including Cardinal Angelo Becciu and Archbishop Edgar Pena Parra.
Torzi also told the court that Tirabassi threatened his life and his family, and offered him the services of a prostitute to “celebrate” their business together.
Why it matters
The court judgment raises the possibility that the highest-ranking Vatican officials personally signed off on contracts explaining the exact details of a deal which they later claimed defrauded them.
There is a discrepancy between Torzi’s claim that they had documentary knowledge of the deal, and their claim that Torzi defrauded them. That is, as yet, entirely unexplained.
The details contained in the court documents indicate that while Vatican prosecutors allege fraud and extortion, they did not produce evidence that would implicate senior clerics in the Secretariat of State for their role in approving financial deals.
That decision could raise the question of whether Vatican prosecutors are allowed to follow their investigation freely. It could also raise questions about their competence, a point raised by the UK judge.
The judgement confirms details of previous reporting on the Vatican financial scandal. But the claims that Tirabassi is blackmailing high-level officials could make an eventual trial a much more difficult prospect for prosecutors, if Vatican officials are concerned it could lead to further scandal. And Torzi has not provided evidence to back up his claims about Tirabassi.
Full story below.
In November 2020, a UK court issued an order against Gianluigi Torzi, which prevented him from accessing bank accounts under his own name and belonging to his company Vita Health Ltd., previously known as Sunset Enterprise.
The order was requested by UK prosecutors, on behalf of the Promoter of Justice in the Vatican. Prosecutors argued that money in the accounts could be the proceeds of criminal activity and Torzi had to be prevented from dissolving them.
Torzi appealed. After a hearing, a UK judge lifted the order on March 10.
Torzi was arrested in the Vatican in June 2020 and faces six counts of embezzlement, fraud, extortion, and money laundering. He is accused of trying to extort 15 million euro from the Secretariat of State, a charge he denies.
The charges center on the Secretariat of State’s dealings with businessman Raffaele Mincione, with whom the secretariat invested hundreds of millions of euros borrowed from Swiss banks, and from whom they eventually bought a London building at 60 Sloane Avenue.
Torzi was hired by the secretariat to act as a broker for the final sale of the building in 2018. Vatican prosecutors allege that Torzi, together with several Vatican officials and investment advisors, is part of a conspiracy to defraud the secretariat that began in 2014.
The Vatican says that as part of the conspiracy, Torzi strong-armed the secretariat by changing the terms of the deal, and trying to extract an unexpected 15 million euro, midway through the purchase.
Prosecutors say the conspiracy includes Mincionce, Fabrizio Tiribassi, who was a lay official in the Vatican secretariat’s administrative office until it was raided by Vatican police in 2019, and Msgr. Alberto Perlasca, who led the same administrative office until he was moved to the Apostolic Signatura in 2019.
Torzi has repeatedly asserted his innocence, and said the charges against him are the result of a misunderstanding.
Mincione has also repeatedly insisted that he acted in good faith in all his dealings with the Vatican, and is suing the Secretariat of State in a separate UK court action.
What the UK judge found
Judge Tony Baumgartner, sitting at Southwark Crown Court in London, found that prosecutors failed to satisfy the burden of proof that Torzi’s access to the bank accounts in question posed a risk that he would liquidate funds which could be subject to a later judgement by a Vatican court. The judge variously noted that accounts had already been frozen at the Vatican’s request in Switzerland, and that Torzi had access to the money for months following his arrest but made no attempt to liquidate the accounts.
But the judge also considered the facts of the Vatican’s case against Torzi.
The judge noted a lack of proof that Torzi had engaged in criminal activity while acting as a broker for the sale of the London building. As has been previously reported, the final sale of the London building involved passing ownership of the holding company which controlled 60 Sloane Ave. to a company owned by Torzi, Gutt SA in November, 2018.
The charges against Torzi allege that he restructured Gutt to strong-arm the Vatican, creating 1,000 voting shares in addition to the 30,000 general shares in the company, effectively separating control of the company from majority ownership. Torzi passed on the 30,000 general shares to the Secretariat of State while retaining the 1,000 voting shares, which Vatican prosecutors allege was “secretive and dishonest,” and amounted to fraud.
Vatican prosecutors allege that he attempted to extort the secretariat for millions of euros in exchange for the voting shares.
But according to the UK judge, Torzi produced documents proving that the arrangement, including the share structure, had been specifically reviewed and approved by Perlasca, who was acting with the express authority of Archbishop Edgar Pena Parra, the substitute for general affairs at the secretariat since August 2018.
Documents submitted by Vatican prosecutors also appear to show that the entire deal was personally authorized by Cardinal Pietro Parolin, the Secretary of State, even while Torzi is being charged with fraud.
The UK judgement notes that the ongoing investigation and prosecution by Vatican authorities was initially triggered by a 2019 complaint by the Institute for Works of Religion (IOR), commonly called the Vatican bank.
Previous reporting has shown that Cardinal Parolin was personally involved in attempts to force through a €150 million loan from the IOR in order to cover the mortgage of 60 Sloane Avenue, which the Secretariat of State assumed when it bought the building.
Cardinal Parolin wrote directly to the bank’s president, pressuring him to support the application which, he said, represented high-priority “needs of the Holy See.” Parolin was a member of the bank’s supervisory board at the time he sent the letter, even while he has claimed not be aware of the deal’s details.
The judge said he found no evidence to suggest that Torzi was involved in the secretariat’s dealings with Mincione over the London building until November 2018, still less that he was part of a conspiracy dating back to 2014.
Torzi and Mincione: Deals or no deals?
Neither the prosecutors nor the judge addressed a remaining important aspect to the affair: a set of very unusual business dealings between Torzi and Mincione.
The Pillar has previously reported that Mincione invested Vatican money in debt products marketed by Torzi, some with links to mafia-affiliated companies. Mincione invested Vatican money into one such debt product called Sierra One bond,
The judge accepted an argument from Torzi that a highly suspicious 4 million euro payment from Sierra One did not, by itself, prove the criminal activity that Torzi is accused of.
But the amount of money lent by Torzi to Mincione, and the timeframe in which it was lent, tracks with millions of euros which Torzi’s company is accused of misappropriating from an Italian insurance company, illicitly selling more than 25 million euros in government bonds belonging to the insurance company.
As part of a legal settlement, he was obligated to repay through sale of a bond referred to as Augusto.
Coincidentally, Torzi’s reported efforts to raise Vatican investment in Augusto are believed to form part of the charges of blackmail linked to the London building.
The Augusto bond also featured in important reported conversation in December 2018, between Torzi, lay secretariat official Fabrizio Tirabassi, and Enrico Crasso, a former executive at Credit Suisse, who manages hundreds of millions of euros in investment for the secretariat.
During that meeting, a recording of which was reported by Italian newspaper Corriere della Sera last year, Torzi told Tirabassi that he needed to realize an additional 10 million euros for his role in brokering the final sale of the London building. He specifically pressed for Vatican funds to purchase the Augusto real estate bond.
“Tomorrow if you don’t buy Augusto I’m in the shit,” he told Tirabassi and Crasso, according to the recording. He later offered to drop the amount he demanded to 8 million euros.
Torzi responds: Vatican threats, blackmail, and prostitutes
The judgment included a summary of an account from Torzi himself, which sought to counter the allegations of Vatican prosecutors. This is the first statement from Torzi to offer his perspective on the scandal of which he is at the center.
Torzi denied involvement in a conspiracy, and alleged that he had been brought into the Vatican’s orbit in order to help the Secretariat of State purchase the London building and end its relationship with Mincione. He claims that he planned with the Vatican to purchase the building through Gutt SA, retain voting shares in the holding company, and manage the property for an annual commission: all of which, he said, was discussed directly with Vatican officials and explained in documents signed by them.
Torzi also claimed that he was pressured by Crasso and Tirabassi to sell the management of Gutt SA to the Centurion Fund, a private equity vehicle which managed Vatican assets — using them to back the movie “Rocketman,” among other things.
According to the UK judgement, Torzi said Crasso had bragged to him that the Malta-based Centurion fund was “completely unregulated with respect to alternative investment policies.”
While Torzi has been accused of trying to extort millions from the Vatican during his December meeting with Crasso, and Tirabassi, he told the UK court that actually they threatened his life, and his children.
“You either give up the property and go away, or your life and that of your children is at risk,” Torzi says the pair told him.
While explaining the transaction, he also alleged that in November, 2018, “Tirabassi offered him the services of a prostitute as a gift to acknowledge the work he had done, but Mr Torzi declined the offer,” according to the court judgment.
According to the judge, Torzi also claimed that Tirabassi had admitted blackmailing several prelates of the church, including Cardinal Angelo Beccui:
“Mr Tirabassi was not a man who was unaccustomed to questionable and nefarious practices. Mr Tirabassi openly admitted blackmailing several prelates of the church, including Cardinal Angelo Beccui, who had been Substitute before Archbishop Peña Parra. None of this, however, seemed to deter Mr Torzi from pressing ahead with the deal,” wrote the judge.
Torzi’s allegation about Tirabassi blackmailing Cardinal Becciu is significant. Becciu served for years as sostituto at the Secretariat of State and has been involved in several questionable financial transactions. He was made cardinal and promoted out of the secretariat by Pope Francis in June, 2018, where he was succeeded by Pena Parra.
In September 2020, Pope Francis ordered Becciu to resign his curial position and his rights as a cardinal after Vatican prosecutors presented a dossier of information to the pope relating to Becciu’s handling of Vatican finances.
In December 2020, the pope stripped the Secretariat of State of its financial portfolio, and ordered the department to turn over control of all bank accounts and investments to APSA.
Torzi claims that, through an attorney, Pope Francis was informed of the threats, the blackmail, and the offer of a prostitute in late 2018. He says the pope decided Crasso, Tirabassi, and Perlasca should be cut out of the transaction, and ordered it be handled by Pena Parra directly.
Torzi added that negotiations with Pena Parra broke down over the next months, even after the archbishop arranged a private audience between Torzi’s family and the pope, and that Torzi was ultimately forced to accept less compensation for his involvement in the deal than he considered to be fair, before eventually he was arrested and charged with extorting and defrauding the Vatican.
Tirabassi, the lay Vatican official accused by Torzi of blackmail and threats, was suspended following raids by Vatican police on the Secretariat of State in 2019. Since then, his exact status has not been confirmed by the Vatican, though some reports have said he has been granted early retirement status by the Holy See.
What happens next
The UK decision concluded by determining that prosecutors had significantly misrepresented the Vatican’s investigation in order to freeze Torzi’s assets, and had even misrepresented the extent of the secretariat’s losses on the Vatican property.
“I make it plain that I do not make any finding that the Restraint Application was brought in bad faith by the Vatican. I do not think, however, that, in exercising the Court’s discretion, the interests of justice would be properly met by the Court not discharging a restraint application that is so badly faulted as this one. It would make a mockery of the process otherwise, and provide ready encouragement to others who chose to adopt the same approach,” Judge Baumgartner concluded.
Vatican prosecutors have long been expected to begin a trial against Torzi for his role in the ongoing financial scandal. The UK court’s decision doesn’t impede that possibility, and, while offering a withering assessment of the evidence offered to the UK court by Vatican prosecutors, the judge found no reason to suspect the Vatican prosecutors had brought the case in bad faith.
But the result does raise questions about how well Vatican prosecutors have prepared their case against Torzi, and especially how thoroughly they have investigated the businessman’s dealings with Mincione.
The order also openly questions whether Vatican prosecutors have investigated the claims that Perlasca’s superiors, Pena Parra and Parolin, knowingly signed off on bad deals, raising the possibility that Vatican prosecutors may have tried to secure the UK court order against Torzi without airing evidence that could be damaging to the Secretariat of State.
The judge noted that while the Secretariat of State claims Torzi blackmailed it, it had never made a legal complaint against that in English court, which had jurisdictions over its contract, apparently to avoid scandal.
“It may have been possible for the Secretariat to seek relief from the English courts... to force Mr Torzi to hand direct control of Gutt to it, or to pass over the beneficial ownership of the Chelsea Property to it. Mr Torzi may have met any such claim with a counterclaim for the losses he said he suffered that were the subject of negotiation with Archbishop Peña Parra.”
“When invited to explain why no contemporaneous complaint was made to the authorities about Mr Torzi’s alleged blackmail, the [Vatican] said that the Secretariat wished to avoid exposing itself to scandal. That may be so, but I do not find the explanation convincing for the reasons I have identified,” the judge wrote.
The UK court decision also leaves open the question of how Perlasca, alleged to have defrauded his employers, would have actually benefited from doing so.
The most pressing question raised by the UK decision concerns Tirabassi, who was, for years, at the center of the Secretariat of State’s financial dealings, including its involvement with Crasso, Torzi, and Mincione. At least according to Torzi, Tirabassi now stands accused of blackmailing senior Vatican prelates, and threatening Torzi’s life and family.
While Vatican officials have served search and seizure warrants on Tirabassi’s homes, they were later forced to hand back hundreds of thousands of euros in cash and valuables after an Italian court ruled they had been improperly seized.
It now seems unlikely that Torzi could see the inside of a Vatican City court without being asked to repeat and substantiate his allegations against such a senior Vatican official.
Tirabassi, in turn, could be forced to answer those allegations in court, offering the possibility of further scandals and details emerging about the inner workings of the Secretariat of State. Unless Vatican prosecutors find themselves, for any reason, unable to bring the matter to court.
A date for a trial against Torzi has not yet been announced.