Vatican investments linked to global money laundering investigations

Vatican City, Dec 7, 2019 / 15:05 pm

A fund in which the Vatican's Secretariat of State has invested tens of millions of euros has links to two Swiss banks investigated or implicated in bribery and money laundering scandals involving more than one billion dollars. The fund is under investigation by Vatican authorities.

The fund, Centurion Global Fund, made headlines this week that it used the Vatican assets under its management to invest in Hollywood films, real estate, and utilities, including investments in movies like "Men in Black International" and the Elton John biopic "Rocketman."

Italian newspaper Corriere della Serra reported that the Centurion Global Fund has raised around 70 million euro in cash, and that the Holy See's Secretariat of State is the source of at least two-thirds of the fund's assets. The Vatican's investment is reported to include funds from the Peter's Pence collection, intended to support charitable works and the ministry of the Vatican Curia.

Centurion registered a loss of some 4.6% in 2018, while at the same time incurring management fees of roughly 2 million euros, raising questions about the prudential use of Vatican resources.

But beyond losses, a CNA investigation has found that Centurion Global Fund is connected to several institutions linked to allegations of money laundering.

Fund prospectus documents state that all Centurion investment funds are held by Lugano-based Banca Zarattini, a small Swiss bank providing private banking, asset management, and fixed income trading services.

Swiss and U.S. media outlets in 2018 reported that Zarattini was named in indictments filed by U.S. prosecutors in a $1 billion money laundering case, involving the Venezuelan national oil company PDVSA and Venezuela's president Nicholas Maduro.

Along with an offshore bank and a New Jersey institution that has faced several investigations for non-compliance with money laundering regulations, Zarrattini was at the time holding funds subject to seizure in the PDVSA money laundering investigation.

Swiss financial news sites also linked the bank to an alleged $62 million bribe paid to a PDVSA official.

Centurion Global Fund shares a corporate office, 259 St. Paul Street in Valetta, Malta, and a single phone number and email address, with a Malta-based investment group, Gamma Capital which is listed as Centurion's formal investment manager.

Gamma Capital's founder and owner is Enzo Filippini. Before founding Gamma, Filippini served as head of the treasury department for a now-closed Swiss bank, BSI.

In 2016, Swiss banking authorities effectively shuttered BSI by a forced extinctive merger, after concluding that it had committed "serious breaches of the statutory due diligence requirements in relation to money laundering and serious violations of the principles of adequate risk management and appropriate organization."

European brokerage firms like Gamma Capital Trader are required to disclose the institutions through which they execute client trades each year. In 2017, Gamma executed all of its trades through a single bank – Banca Zarattini.

The next year, 2018, Gamma used only two institutions to execute client trades, Zarattini and Sparkasse Bank Malta, which was also involved in the PDVSA money laundering scandal, according to multiple media reports.

The Times of Malta reported that "Sparkasse Bank was mentioned in the Panama Papers data leak as the Maltese institution of choice for infamous money-laundering Panamanian law firm Mossack Fonseca."

The CEO of Gamma Capital Markets is Alexander Vella. Vella is also the sole listed director at E2S Monitoring, a compliance firm which also lists its address as 259 St. Paul Street. E2S is the company that registered Centurion Global Fund with Maltese regulators in 2016.

On Dec. 5, Vella's picture and profile as CEO were listed on the Gamma website, but were erased sometime on Dec. 6, though CNA has retained December screenshots of Vella on the site, and archived copies of the listing. Vella is still listed as CEO on his personal LinkedIn page.

The formal nature of the relationship between the Vatican-backed Centurion Global Fund and Gamma is described in the fund's proposal document. Centurion is managed by a longtime Vatican financial advisor and Swiss resident Enrico Crasso, whose former company, Sogenel, is listed as the investment adviser for the fund's investment portfolio, while Gamma is listed as the fund manager.

Centurion's management fees in the prospectus are listed as 2.25% of assets under management annually and 20% of profits, and the fund has a seven year investment life cycle. The effective fee could, however, be higher, because among Centurion's listed investments are other private equity funds which could have similar fee structures, including EOS FYSIS Fund Sicav and TAGES Helios II.

According to Corriere della Serra, Grasso also played a "central role" in a controversial investment by the Vatican's Secretariat of State in London property development with the Italian businessman Raffaele Mincione.

CNA has reported that the Vatican's purchase of the property at 60 Sloane Avenue in Chelsea was arranged and is being managed through a complicated network of individuals and businesses linked to previous and current lawsuits and criminal investigations for fraud and money laundering. It is not clear what role Crasso is alleged to have played in the deal, into which the Secretariat of State has invested around $200 million.

Filippini, Gamma Capital's owner, is also connected to the bank that financed the London property deal. CNA has reported that the Secretariat of State financed the purchase of the London property with a loan against its accounts at the bank for which Fillipini was an officer: BSI.

The Holy See Press Office said on Wednesday that "investigations are in progress" regarding the Centurion Fund and other investments made by the Secretariat of State.

"Lines of enquiry which may help clarify the position of the Holy See with respect to the aforementioned funds and any others, are currently being examined by the Vatican judiciary, in collaboration with the competent authorities," the statement said.

Multiple phone calls from CNA to Centurion and Gamma went unanswered. An email requesting comment from Vella was not responded to by time of posting.

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