Vatican brokers plan for hospital in Torzi fraud probe

News: Vatican

The Holy See announced Friday it is brokering a plan to help a debt-ridden Catholic hospital in Rome retain its Catholic identity, and continue under the management of the religious order which has managed it for more than four centuries. 

Italian authorities are investigating whether businessman Gianluigi Torzi, who is also on trial in the Vatican for extortion, committed a multi-million euro fraud against the hospital.

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Italian authorities are investigating whether companies owned by Torzi defrauded Rome’s Fatebenefratelli Hospital, when they helped convert debts owed to the hospital into securities which could be sold at a diminished value to raise cash for hospital operations. 

There are conflicting reports in Italian media about how exactly Torzi’s companies are believed to have defrauded the hospital, but generally they are described as have realized large commissions and exorbitant service fees for their work, while allegedly withholding some funds owed to the hospital.

Torzi has maintained his innocence.

The hospital was sold to a private healthcare group in June. But the Holy See’s statement Friday indicated that it is helping to develop a “recovery plan” that will resolve the long-standing “economic and management crisis” at the hospital, while allowing it to continue being overseen by the Brothers Hospitallers of Saint John of God religious order, which founded the hospital in the sixteenth century.

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Torzi’s companies have been embroiled in scandal involving debt securitization at other Catholic hospitals.

Torzi has also been implicated in a similar scandal involving securitized debt, together with his long-time business associate Giacomo Cappizzi. 

Capizzi was the administrator of the Sierra One Bond, a financial product valued at 100 million euros, made up of receivables owed to Italian hospitals and related vendors, that was packaged and sold by Torzi’s company Sunset Enterprise Ltd. 

Included within the Sierra One bond were debts issued by facility management company Esperia SpA, which was ordered into forced liquidation for alleged ties to a Camorra mafia crime family in July, 2018

That order was reversed on appeal, after the company showed it had moved its headquarters to Rome just before the prefecture’s order, moving Esperia out of the prefecture’s jurisdiction. Esperia previously owned another cleaning services company linked to the same crime family which was liquidated in 2018.

The Pillar has previously reported that Raffaele Mincione, the businessman who for years managed hundreds of millions of euros in Vatican funds for the Secretariat of State, and who sold the Vatican the London building at 60 Sloane Ave., had business connections to Torzi, who was engaged by the Secretariat of State to broker its separation from Mincione and finalize the purchase of the London building. 

Company records examined by The Pillar show that, on Dec. 31, 2018, one month after the completion of the building’s sale, a fund through which Mincione invested Vatican assets under his management held 3.9 million euros of investment in Sierra One SPV SrL, a financial special purpose vehicle made up of receivables owed to Italian hospitals and related vendors. 

Torzi has been indicted in the Vatican for allegedly extorting the Secretariat of State for 15 million euros in exchange for control of the London building after ownership of the building was transferred during the purchase to his Luxembourg holding company, Gutt SA. 

He has also been accused of funneling parts of that 15 million euros to Capaldo, who is not charged in the current Vatican financial trial, and remains in effective control of the Secretariat of State’s London holding company.