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Vatican monsignor denied house arrest in $26M plot

Nicole Winfield, Associated Press

FILE - In this photo taken on May 22, 2013, Rene Bruelhart, director of the Financial Information Authority, an institution established by Pope Benedict XVI in 2010 to monitor the monetary and commercial activities of Vatican agencies, meets the press at the Vatican. The tumultuous revelations about wrongdoing involving the Vatican bank couldn't have come at a worse time for Rene Bruelhart, the Swiss-born anti-money laundering expert recruited by the Holy See last year to oversee its push for greater financial transparency. Bruelhart was heading to Sun City, South Africa for the annual meeting of the Egmont Group, a gathering of financial information agencies from 130 countries, when the Vatican announced that its top two bank managers had resigned amid a blossoming financial scandal and indications that the executives were holding back the bank's much-touted anti-money laundering efforts. Despite the revelations, the Holy See won a coveted membership in the Egmont Group on Wednesday, joining a club that aims to share financial information in the global fight against money laundering and terror financing .(AP Photo/Gregorio Borgia)

VATICAN CITY (AP) -- The Vatican monsignor arrested in a 20 million euro ($26 million) money smuggling plot has been denied house arrest.

A judge on Friday refused the request by Monsignor Nunzio Scarano's lawyers to let him await a decision on his fate in a monastery, ruling he must stay in Rome's Queen of Heaven prison. Attorney Silverio Sica said he would appeal.

Scarano was arrested June 28 along with two others, accused of plotting to bring 20 million euros into Italy from Switzerland without declaring it at customs.

The decision came a day after the Vatican bank president, Ernst von Freyberg, told his board that an internal investigation into the Scarano affair uncovered "clear failings" in the bank's anti-money-laundering procedures, according to excerpts of his remarks obtained Friday by The Associated Press.