A senior Vatican official has denied accusations of fraud relating to the purchase of an historic castle in Umbria.
Archbishop Vincenzo Paglia, President of the Pontifical Council for the Family, is one of ten people under investigation by Italian prosecutors for alleged fraud and embezzlement over the purchase of San Girolamo castle in 2011.
The castle, on the hills outside the town of Narni, is situated in the diocese of Terni, where Paglia was bishop from 2000 to 2012.
The local council sold San Girolamo castle to the real estate company IMI Immobiliare, which is headed by the bursar of Terni diocese, Paolo Zappelli.
The then Bishop Paglia is accused of having illegally used diocesan funds to purchase the castle.
Council officials are alleged to have colluded with Paglia, selling the castle in 2011 for far less than its true value.
The Italian daily Il Corriere della Sera reports that prosecutors are alleging the €1.76 million price agreed was barely a third of its real value – which they estimate to be more than €5.5m (£4m) – and that the diocese intended to later sell the castle at its market value, creating a profit of nearly €4 million (£2.9 million).
Mr Zappelli and one other diocesan employee have been arrested in conjunction with the sale.
The Terni diocese is reported to be one of the most indebted in Europe, with a deficit of €25 million (£18m).
Archbishop Paglia denied any wrongdoing. He issued a statement this week, saying: "I remain at the disposition of the investigating authorities and I have full confidence in the justice system.”
Despite its great artistic and cultural value, the castle has been abandoned.
Archbishop Paglia (left) was promoted to head of the Pontifical Council for the Family in 2012 by Pope Benedict XVI. Photo: CNS