Recent legal developments suggest the prosecution could collapse, potentially exposing the Holy See to millions more in liabilities over the infamous £200 million investment.

Newsroom (06/05/2026 Gaudium Press ) The Vatican’s landmark financial crimes trial, initiated in 2022 over an infamous London property deal, faces potential collapse as recent court rulings and strategic missteps by the Secretariat of State threaten to unravel six years of legal proceedings and expose the Holy See to substantial additional losses.

In March, judges at the Vatican City court of appeal issued an unprecedented ruling that effectively voided the executive acts issued by Pope Francis which authorized prosecutors’ initial criminal investigation into the London deal in 2020. The decision ordered a comprehensive review of both the investigation and indictment, creating what amounts to a trial within a trial that could ultimately result in a mistrial declaration and block any future prosecution efforts against the ten defendants cited in the original charges.

While lower court convictions handed down in 2024 remain technically intact, the appellate ruling opens a pathway for the entire prosecution to be dismissed—a development that would represent a near-complete legal humiliation for Vatican prosecutors after nearly a decade of financial scandal and international media scrutiny.

Such a result seems like something the Vatican should be straining to avoid at all costs, but recent developments suggest the Secretariat of State is itself sabotaging its own legal efforts to claw back losses, potentially leaving itself exposed to millions more in liabilities in the process.

The London property deal, centered on a £200 million investment in a building at 60 Sloane Avenue, resulted in the Holy See losing an estimated 200 million euros in the years leading up to 2018. The scandal has involved numerous actors, most notably Raffaele Mincione, the investment manager who ultimately sold the Vatican the London building, and Enrico Crasso, a former investment manager for the Secretariat of State.

According to Mincione’s account, Crasso was instrumental in establishing the Secretariat’s investment arrangements and engaged in conduct that ranged from highly irregular to potentially illegal. Crasso has also faced accusations of attempting to bribe and blackmail other parties involved in the London deal to secure control of the building. Additionally, he orchestrated a Vatican investment of several million euros into what proved to be a fictitious highway development in the United States.

Compounding the Vatican’s legal difficulties, Swiss authorities announced last week that they were abandoning prosecution efforts against Crasso—a case lodged at the Secretariat of State’s own request. The decision came after the secretariat refused to make available key witnesses, including Msgr. Alberto Perlasca, the former head of the secretariat’s administrative office who testified during the Vatican trial, and Archbishop Edgar Peña Parra, the former sostituto at the same department.

The strategic decision to withhold cooperation from Swiss authorities appears designed to avoid repeating previous courtroom embarrassments. In a UK lawsuit brought by Mincione prior to his Vatican City charges, the Secretariat of State was ordered to pay more than £1 million in legal costs. During that proceeding, Peña Parra testified that he signed off on a five million euro invoice he knew to be “completely fictitious” and acknowledged to the court, “You said that I was not honest. I accept that.”

However, the secretariat’s withdrawal from the Swiss case carries potentially devastating consequences. By refusing to cooperate with Swiss authorities on frozen funds identified as part of the complaint, the Vatican closes off any possibility of recovering those assets while simultaneously creating a pattern of disengagement that could prove far more expensive elsewhere.

Mincione is currently pursuing additional legal action in the United Kingdom’s Commercial Court, filing a lawsuit for commercial fraud against the Secretariat of State and various financial institutions. If the secretariat similarly refuses to make Perlasca and Peña Parra available to testify in that proceeding, UK judges may interpret the cumulative pattern—the Swiss case collapse, the Vatican prosecution’s disarray, and witness unavailability—as evidence that the secretariat has effectively abandoned its case against Mincione and conceded the absence of viable claims.

Such a determination could expose the Vatican to another significant legal defeat, potentially resulting in damages running into the millions of euros. Mincione could argue that he was essentially duped into accepting illegally appropriated Vatican funds for investment, only to be subsequently blamed for the investment’s failure.

Beyond the immediate financial implications, a series of legal reversals would compound already substantial reputational damage to the Holy See. The financial scandal investigation and trial have raised serious questions about the competence and methods of Vatican City’s prosecutor’s office while bringing allegations of corruption at the highest levels of the Roman curia into public view.

Under Pope Leo, the Vatican has posted guardedly positive recent financial results, with the pontiff expressing broad satisfaction with reform efforts despite acknowledging that serious work remains ongoing. However, a cascade of legal losses resulting in apparent wrongdoers escaping punishment while the Secretariat of State faces liability for what it characterizes as crimes committed against it would significantly undermine any momentum in the institution’s ongoing reform initiatives.

As the Vatican’s criminal prosecution hangs in the balance, the strategic missteps by the Secretariat of State suggest that the consequences of the London property deal saga may extend far beyond the financial losses already sustained.

• Raju Hasmukh with files from The Pillar

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