Vatican Bank Probed for Money Laundering

Italian authorities have frozen $34 million at the heart of a money-laundering probe of the Vatican Bank. Two officials, including the chairman of the institution, are under investigation for failing to disclose the identity of clients linked to the funds, which is required by Italian law. The bank, whose main customers are Vatican officials and clergy, often transferred funds into other banks without revealing clients' identities until 2007 when Italy initiated tougher laws.

Authorities froze the suspect funds this week after the Vatican bank attempted to transfer $30 million to JP Morgan Chase in Frankfurt and $4 million to a small Italian bank, reports the Wall Street Journal. Another Italian bank first holding the funds reported "irregularities" in the Vatican operation. Officials at the Vatican, still reeling from a slew of clergy pedophile scandals, issued a statement saying they were "perplexed and amazed" by the investigation. "All the procedures aimed at preventing terrorism and money laundering have been taken," the statement added.
(More Vatican stories.)