A businessman named Gianluigi Torzi, who acted as middleman in the Holy See's £300-million property deal in London, said that Fabrizio Tirabassi, a senior Vatican lay official involved in that purchase, allegedly offered him the services of a prostitute, The Times reports citing a High Court ruling.
According to the newspaper, Torzi also claimed that Tirabassi "threatened his life and openly boasted of blackmailing senior clergymen in Rome".
The businessman reportedly became concerned with Tirabassi's behaviour and even related that information to Pope Francis during a private meeting.
This development comes as the Crown Court in Southark revoked an earlier order that had frozen Torzi's funds, as he was charged by the Vatican with extortion, embezzlement, aggravated fraud, and money laundering.
Vatican prosecutors previously alleged that Torzi was involved in a conspiracy to defraud the Vatican's Secretariat of State "and extort millions of euros from it, in part through fees the Vatican called exorbitant", as Reuters puts it.
Lawyers representing Torzi, however, insisted that the businessman's dealings had been approved, directly or indirectly, by top Vatican officials, including Secretary of State Cardinal Pietro Parolin and his deputy for general affairs, Archbishop Edgar Pena Parra.
The court ruling mentions how Vatican lawyers sought to show "the astonishment of higher authorities" over some of the financial details of the deal negotiated by two lower-level officials in the Secretariat, though Judge Tony Baumgartner ruled that if that was the case, Parolin and Pena Parra "must have had the wool pulled completely over their eyes".
"The judge rightly found very troubling failures by the Vatican to disclose the full facts of the case", said James Mullion, one of Torzi's lawyers. "The people who signed the contracts were signing them with the authority of the Vatican".
The judge also mentioned that he revoked the previous ruling that resulted in the freezing of some of Torzi's assets partly because the Vatican's "non-disclosures and misrepresentations are so appalling".