UK courts rule in Mincione and Torzi cases
News: Vatican finances
What’s new: Two businessmen at the center of the Vatican financial scandal and trial saw British judges reject their legal efforts to fight off Italian and Vatican charges of criminal wrongdoing.
Why it matters: Vatican prosecutors have suffered a series of setbacks and criticisms for their handling of the case against Gianluigi Torzi and Raffaele Mincione, both of whom are resident in the UK. The decisions last week, issued by two different courts, would seem to end their hopes of using British courts to fight the Italian and Vatican allegations against they’re facing.
Two court decisions in the UK last week have helped clear the way for the trials of businessmen facing criminal charges related to the Vatican financial scandal.
Both Raffaele Mincione, the investment manager who sold the Secretariat of State a London building in 2018, and Gianluigi Torzi, the broker who finalized the building’s purchase for the Vatican, had asked courts in London to intervene in aspects of their cases.
In Mincione’s case, a judge ruled on Friday that a lawsuit brought by the businessman against the Vatican’s Secretariat of State would be stayed indefinitely because of the ongoing legal proceedings in Vatican City.
On Torzi, a judge rejected on Nov. 24 arguments that problems with evidence gathered by Vatican prosecutors should prevent Torzi from being extradited to Italy, where he is wanted on Italian charges of financial crimes related to his role in the Vatican financial scandal.
Mincione petitioned the High Court of England and Wales in June 2020 for declaratory relief against the Secretariat of State, asking judges to rule he "acted in good faith” in his dealings with the Vatican.
Mincione’s lawyers argue that the Holy See may be trying to nullify the sale of the building at 60 Sloane Ave., for which the Vatican paid a total of 350 million euros and is now expected to sell at a loss of more than 100 million.
At the time Mincione filed the suit, official Vatican media described his management of investments for the Secretariat of State as “speculative” and a “conflict of interest.”
On Friday, Judge Simon Salzedo ruled that the “proceedings should be stayed until there is a material change of circumstances,” effectively halting the lawsuit until the resolution of the Vatican’s own criminal process against Mincione.
According to the judge’s ruling, the Vatican argued that the suit was brought by Mincione “as a result of learning of the arrest of Mr. Torzi [in June 2020], and for the purpose of having something to say to the news media and the Vatican State criminal court to support the sincerity of his claims of innocence,” and that a ruling on the case would interfere with the Vatican trial now underway.
After he was questioned by Vatican prosecutors on several occasions, and was twice the subject of Vatican-ordered search and seizure warrants, Mincione was formally charged in July with embezzlement, fraud, and self-laundering.
After a series of pre-trial hearings, prosecutors in the Vatican agreed this month to reopen the investigative phase of the charges against Mincione which, his lawyers argue, meant there was no ongoing legal process against him in the Vatican.
The judge rejected this argument as a question of “form rather than substance.”
“The substance of the matter is that there is a criminal investigation with which a competent criminal court is seised and the matters alleged against Mr Mincione and others will have obvious knock-on effects” on the case, the judge found.
The judge also determined that, although the suit was filed by Mincone against the Secretariat of State, the real target of his claims is the Vatican’s Office of the Promoter of Justice, which is charging Mincione.
Since there is no expectation that the Vatican prosecutors' office would participate in English court proceedings, especially while they are pursuing charges related to the same case, the matter should be deferred indefinitely, Salzedo said.
Mincione’s relationship with the Secretariat of State dates back to 2014, when the curial department, under the direction of then-Archbishop Angelo Becciu, invested some 200 million euros in Mincione’s Athena Global Opportunities Fund. Previous reporting has established that the Vatican investment came from lines of credit extended by two Swiss banks, BSI and Credit Suisse, against other Vatican funds held on deposit.
Mincione invested Vatican funds in a 45% stake in the London building, which was owned by another of his companies, as well as in other ventures owned by or connected to him.
After Becciu’s departure from the secretariat in 2018, the Holy See separated itself from Mincione. Under the terms of the separation agreement, the Secretariat of State purchased the remaining share of the London building, gave up its remaining investment in the Athena Global Opportunities Fund, and reportedly paid an additional 40 million euros to Mincione through Athena, and assumed a 150 million euro mortgage on the property.
Two days before the High Court ruling on Mincione’s lawsuit, a judge sitting for Westminster Magistrates Court issued a ruling in the extradition case of Gianluigi Torzi, who is wanted on charges of financial crimes in both the Vatican and in Italy.
On Nov. 24, Judge Michael Snow, who is hearing the extradition case against Torzi filed by Italian prosecutors, cleared the way for the extradition process to continue, rejecting arguments by Torzi’s lawyers that the charges against him stem from flawed evidence gathered by Vatican prosecutors in their own investigation into charges against the businessman.
Torzi is accused of a range of financial crimes by the Vatican related to the purchase of the building at 60 Sloane Ave, London, including money laundering and extortion.
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,
Torzi, in turn, used his companies to lend Mincione tens of millions of euros during the same period.
Despite these business ties to Mincione, Torzi was appointed by the Secretariat of State to broker the final phase of the building’s purchase. Torzi acquired ownership of the Minione’s holding company which controlled the building through his own Luxembourg holding company, Gutt SA.
Torzi then restructured the ownership shares of Gutt, creating a majority class of 30,000 non-voting shares, which he passed to the Vatican, while retaining the 1,000 voting shares which controlled Gutt and therefore the building. The Vatican alleges that he then extorted them for an additional 15 million euros for control of Gutt, and thereby the building.
Torzi was arrested in the Vatican in June, 2020, and released after he agreed to post a 3 million euro bond — he never made the payment and instead returned to London where he has remained since then.
Earlier this year, Italian prosecutors charged Torzi with tax evasion and money laundering in relation to his alleged extortion of the Vatican.
After an Italian appeal court ruled that the charges against him should be revisited over concerns about evidence provided to prosecutors by their Vatican counterparts, Torzi’s lawyers have contended that the extradition process should be halted.
But, Judge Snow found, the Italian and Vatican processes are separate legal issues, and that "I am satisfied that whatever the rights or wrongs of the case brought by the Vatican City State may be, these are not something I am required to rule upon or should rule upon," paving the way for the process of Torzi’s extradition to Italy to continue.
Torzi has previously argued in a UK court that the details of his plan for the conveyance of the building were approved by senior officials at the Secretariat of State, including Cardinal Pietro Parolin.
Acknowledging those arguments by Torzi in a previous case, which resulted in the UK courts lifting of an asset freeze against Torzi, Snow said they were "neither admissible nor relevant" to the Italian extradition request.
So one could say… all roads lead to Rome?
Chi va piano va sano et va lontano