Banker says he warned Vatican about London fund investor

VATICAN CITY (Associated Press) – A longtime Vatican investment banker testified on Monday that he had repeatedly expressed concerns about a fund that had been investing in a troubled London property, but said the Holy See’s state secretariat had insisted on pursuing the deal even as money was lost.

Enrico Crasso said he was on the sidelines of the London deal, which was at the center of the Vatican’s major trial of fraud and embezzlement. Prosecutors accused Crasseau and nine other people of cheating the Holy See with tens of millions of euros and eventually extorting the Vatican for 15 million euros for control of the property.

Krasow, who has managed state investments for 27 years in Credit Suisse and its private companies, is charged with several counts of embezzlement as well as corruption, fraud and extortion. Krasow denies wrongdoing, and on Monday testified that in his more than a quarter-century work for the Holy See, the investments he ran have always turned a profit.

On his first day on the platform, Krasow confirmed that he was brought into the London deal only by chance after the State Secretariat called him in to help it assess ways to diversify its asset portfolio in 2012, first in a potential petroleum development. Dealing in Angola and then property in London.

Krasow said Credit Suisse had recommended commodities expert Rafael Mencioni to evaluate the Angola deal. After all parties agreed against it, Mincioni remained as the new money manager for the Vatican through the Athena Investment Fund which was investing in the London property.

Crasso referred to an official statement issued in 2016 by the Vatican’s Secretary of State, Cardinal Pietro Parolin, stating that there are no restrictions on where Credit Suisse’s assets can be invested in the Vatican. Crasso’s defense cited the letter to refute allegations of embezzlement that Crasso directed Vatican funds earmarked for philanthropy into highly speculative investments.

Crasso testified that he was essentially sidelined after the Vatican began working with Mincione and cited a series of emails he sent to Vatican officials expressing concern and bewilderment over some of Mincione’s investment options.

By 2018, the Vatican decided to exit the Mincione Fund because it had lost about 18 million euros and was looking for a way to buy it from the London property. Enter another defendant, Gianluigi Torzi, who was proposed by a friend of Pope Francis as a potential manager and developer of the property.

The deal involved a €40 million payment to Mincione and then entering into an agreement with Torzi via a new holding company, Gutt, to manage and develop the property. The deal, in which the Vatican owns 30,000 shares in 1,000 shares in Gott and Turzy, was forged over three days at Turzy’s London office in November 2018.

Crasseau said he attended the meetings but had no real reason to be there because the negotiations were being run by two of the Vatican’s top money managers.

Unknown to the Vatican at the time, Torzi organized Gutt’s shares in such a way that his 1,000 shares were the only voting rights, meaning he had control of the building and the Vatican had virtually none.

According to previous testimony, Francis and the Vatican decided not to prosecute Torzi for alleged fraud and agreed to pay €15 million to finally take control of the property – a sum Vatican prosecutors say represented extortion.

Krasow said there was no logic to prosecutors claiming his involvement in the alleged blackmail because he only met Torzi for the first time a few days before the November 2018 meetings.