Supporter of transparency: Pope Francis is believed to have been informed of the scandal. Photo: AP

Rome: It was founded 800 years ago by St Francis of Assisi, whose name was taken by the current Pope, but the Franciscan order of friars has found itself mired in a financial scandal allegedly involving fraud and embezzlement of tens of millions of euros.

A branch of the Roman Catholic order had invested some of its money in offshore shell companies based in Switzerland, which had in turn been involved in arms and drugs trafficking, Italian media have reported.

A three-month internal investigation has found extensive financial irregularities at the heart of the Rome-based order, which has about 14,000 members worldwide and owns churches and convents in more than 100 countries.

Michael Perry, the American head of the Order of Friars Minor, took the unusual step of writing an open letter to friars and monks to inform them that the historic order was in a "grave situation", with millions of euros believed to be missing from its accounts.

Advertisement

He said the General Curia, the governing body of the order, "finds itself in grave, and I underscore 'grave', financial difficulty, with a significant burden of debt".

The general treasurer of the order had resigned, he said.

"The systems of financial oversight and control for the management of the patrimony of the order were either too weak or were compromised, thus limiting their effectiveness to guarantee responsible, transparent management", Brother Perry said.

Monks belonging to the order were involved in "a number of questionable financial activities" that had placed the financial stability of the order "at grave risk".

He added: "These questionable activities also involve people who are not Franciscan but who appear to have played a central role."

The situation was so serious that Brother Perry has called in a team of lawyers as well as the civil authorities - magistrates and possibly police - to investigate the scandal. They were now trying to determine "the nature, extent, and impact of what has occurred", he said.

A senior friar with expertise in financial affairs has been appointed to lead the investigation into the alleged fraud and will trawl through records dating back more than a decade.

Pope Francis, who has initiated a radical clean-up of the Vatican bank since being elected in March last year, is believed to have been informed of the scandal.

The Order of Friars Minor is one of the four main branches of the Franciscan order, which was founded by St Francis of Assisi in 1209.

Telegraph, London