The Vatican monsignor arrested in a 20 million euro ($26 million) money smuggling plot has been denied house arrest.A judge on Friday refused the request by Monsignor Nunzio Scarano's lawyers to let him await a decision on his fate in a monastery, ruling he must stay in Rome's Queen of Heaven prison.
Attorney Silverio Sica said he would appeal.
Scarano was arrested June 28 along with two others, accused of plotting to bring 20 million euros into Italy from Switzerland without declaring it at customs.
The decision came a day after the Vatican bank president, Ernst von Freyberg, told his board that an internal investigation into the Scarano affair uncovered "clear failings" in the bank's anti-money-laundering procedures, according to excerpts of his remarks.