Banker says he warned Vatican about London fund investors

VATICAN CITY (AP) — The Vatican’s longtime investment banker testified Monday that he has repeatedly expressed concerns about a fund investing in a troubled London property, but said the Holy See’s secretariat of state is insisting on pursuing the deal , even if it loses money.

Enrico Crasso said he was very concerned about the London deal, which was at the heart of a massive fraud and embezzlement trial at the Vatican. Prosecutors accused Krasso and nine others of defrauding tens of millions of euros from the Holy See and eventually extorting 15 million euros from the Vatican to gain control of the property.

Krasso, who spent 27 years at the National Investment Secretariat at Credit Suisse and his own firm, has been charged with multiple counts of embezzlement as well as corruption, fraud and extortion. Crassau denies any wrongdoing and testified on Monday that during his more than 25 years with the Holy See, he managed investments that were always profitable.

On his first day at the stand, Krassau stressed that he was only brought to London by chance after being asked by the Secretariat of State to help it evaluate ways to diversify its portfolio in 2012, starting with potential oil Development deals in Angola, then London property.

Credit Suisse referred commodities specialist Raffaele Mincione to assess the Angolan deal, Crasso said. Following opposition from all sides, Mincione continued as the Vatican’s new money manager through his Athena Investment Fund, which invests in London property.

Crassau referred to an official 2016 statement by Vatican Secretary of State Cardinal Pietro Parolin making it clear that there are no limits to where the Vatican’s Credit Suisse assets can be invested. The letter was cited by Krassau’s defenders to rebut allegations of embezzlement that Krassaw used Vatican funds for charitable causes in highly speculative investments.

Crassau testified that he was largely excluded after the Vatican began working with Minchione, citing a series of emails he sent to Vatican officials expressing concerns about some of Minchione’s investment options and confused.

By 2018, the Vatican had decided to pull out of Mincione’s fund after it had lost around 18 million euros and was looking for a way to buy him out of the London property. Another defendant, Gianluigi Torzi, was proposed by a friend of Pope Francis as a potential manager and developer of the property.

The deal included paying Mincione 40 million euros and then entering into an agreement with Torzi through a new holding company, Gutt, to manage and develop the property. The Vatican’s deal for 30,000 shares in Gutt and 1,000 in Torzi was negotiated over three days in November 2018 at Torzi’s London offices.

Crassau said he attended the meeting but had no real reason to be there because the negotiations were handled by two of the Vatican’s top internal money managers.

Unbeknownst to the Vatican at the time, Torzie structured Gut shares in such a way that his 1,000 shares were the only ones with voting rights, meaning he controlled the building and the Vatican had almost nothing.

Based on previous testimony, Francis and the Vatican decided not to indict Torzie for fraud and agreed to pay him 15 million euros to eventually gain control of the property — a payment that Vatican prosecutors said amounted to racketeering.

Crassau said prosecutors’ claims that he was involved in the alleged racketeering were illogical because he only met Torzie for the first time just days before the November 2018 meeting.