In a statement released June 5, the Vatican said Gian Piero Milano, Vatican chief prosecutor, and his deputy, Alessandro Diddi, authorized the arrest of the broker, Gianluigi Torzi, after he was interrogated at the Vatican prosecutor's office.
He was being held in a cell in the Vatican police barracks, the statement said.
The arrest was "in relation to the well-known events connected with the sale of the London property on Sloane Avenue, which involved a network of companies in which some officials of the Secretariat of State were present," the Vatican said.
Torzi faces charges of extortion, embezzlement, aggravated fraud and money laundering. If found guilty, he faces up to 12 years in prison.
The arrest is the latest chapter in the saga related to the London property which first came to light in early October when Vatican police conducted a raid on offices in the Secretariat of State and the Vatican financial oversight office.
The day after the raid, the Italian magazine L'Espresso published an internal notice as well as leaked documents, alleging the raid was part of the Vatican's investigation into how the Secretariat of State used $200 million to finance a property development project in London's Chelsea district in 2014.
According to Vatican News, Torzi served as the middleman in the Vatican Secretariat of State's eventual purchase of the majority stake in the London property in 2018 from London-based Italian financier, Raffaele Mincione.
In an interview published June 6 with Italian news agency Adnkronos, Mincione denied any connection with Torzi's involvement in the deal and said he "sold the property to the Vatican."
"I sold it to (Venezuelan Archbishop) Edgar Pena Parra, to the sheriff put in place by other people to do this; I didn't sell it to Torzi," Mincione said. "Torzi was commissioned by the Vatican to buy the property for them."
Archbishop Pena Parra has served as substitute secretary for general affairs in the Vatican Secretariat of State since 2018, succeeding Italian Cardinal Giovanni Angelo Becciu, prefect of the Congregation for Saints' Causes.
While the Vatican incurred debts from the purchase, Torzi received an estimated 15 million euros for brokering the deal.
Several Vatican officials were investigated for their involvement in the deal, including Msgr. Alberto Perlasca, the former head of the Vatican Secretariat of State's administrative office.
In February, Vatican police seized documents and computers at Msgr. Perlasca's home and office because of "what emerged from the first interrogations of the officials under investigation and suspended from duty" after the October raid.
In an interview with the Italian blog Stanze Vaticane published June 8, Msgr. Perlasca denied his involvement in the purchase of the property's majority stake and said he filed a complaint against Torzi for fraud; he also alleged Torzi "made completely unjustified claims of an obvious blackmailing nature."
The October raid also prompted questions regarding Cardinal Becciu's involvement in the deal. The Italian cardinal defended the purchase, saying that making property investments in Rome and abroad was a common Vatican practice.
He also denied accusations that money from the annual Peter's Pence collection, which is earmarked for helping the poor, was used in the deal.
At a book presentation Oct. 29, Cardinal Pietro Parolin, Vatican secretary of state, told journalists that the investment in the London property was not as transparent as it should have been, and he hoped the investigation would shed light on the matter.
"We are working to clear up everything. This deal was rather opaque and now we are trying to clear it up," Cardinal Parolin said, according to the Reuters news agency.
Pope Francis also weighed in on the investigation and echoed Cardinal Parolin's sentiment on the property deal while speaking to journalists Nov. 26 aboard his return flight from Japan.
The London property deal involved "things that don't seem 'clean,'" the pope told reporters. "It was the internal auditor general, who said, 'Look, here is something that doesn't add up.' He came to me." He subsequently authorized the October raid after speaking with the Vatican prosecutor.
The investigation, he said, was proof that financial reforms that began under Pope Benedict XVI were working and that "the Vatican administration has the resources" to report and investigate suspicious activity.