ROME -- The head of the Vatican bank is under investigation for suspected money laundering and police have frozen 23 million euros ($30.21 million) of its funds, Italian judicial sources said on Tuesday. Neither Ettore Gotti Tedeschi, who has been at the helm of the bank for a year, nor the Vatican spokesman would comment immediately on the case, which involves alleged violations of European Union money laundering regulations.
The sources said Gotti Tedeschi and another executive of the Institute for Religious Works (IOR), as the bank is officially known, had been put under investigation by Rome magistrates Nello Rossi and Stefano Fava.
The sources said Italy's financial police had preventively frozen 23 million euros of the IOR's funds in an account in an Italian bank in Rome.
Two recent transfers from an IOR account in the Italian bank were deemed suspicious by financial police and blocked.
One was a transfer of 20 million euros to a German branch of a U.S. bank and another of 3 million euros to an Italian bank.
Gotti Tedeschi, a devout Catholic who has taught financial ethics at the Catholic University of Milan, is a close adviser to Treasury Minister Giulio Tremonti.
He is currently also head of an Italian unit of the Spanish Banco Santander , according to its website, and serves on the board of several major Italian banks.
The IOR principally manages funds for the Vatican and religious institutions around the world, such as charity organisations and religious orders of priests and nuns.
It was involved in a worldwide scandal in 1982 when it was embroiled in the fraudulent bankruptcy of Banco Ambrosiano, then Italy's largest private bank.
The IOR held a small stake in Ambrosiano, whose president Roberto Calvi was found hanged under London's Blackfriars Bridge the same year.
Several investigations failed to determine whether Calvi, known as God's Banker, had been killed or committed suicide.
At the time the IOR was headed by American Archbishop Paul Marcinkus, who died in Arizona in 2006.
The Vatican denied any responsibility for the collapse of Banco Ambrosiano but made what it called a "goodwill payment" of $250 million to Ambrosiano creditors.
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