A former Vatican prelate on trial for an alleged plot to smuggle 20 million euros into Italy was further charged on Tuesday with laundering millions through the Vatican bank, police and his lawyer said, according to Reuters.

Monsignor Nunzio Scarano and two other people served with arrest warrants were suspected of laundering and making false statements, police said. The others were Father Luigi Noli, a friend of Scarano suspended from his Vatican job last year, and a notary.

Fifty-two other people were being investigated on suspicion of abetting money laundering, police said.

Scarano, 61, is under house arrest in his native Salerno, near Naples, and charged with conspiring to smuggle some 20 million euros from Switzerland with a financier and a former secret services officer for rich shipbuilder friends in Salerno. The money smuggling trial began on Dec 3 in Rome.

The new charge, which came after a separate, year-long investigation, concerns suspected money laundering through his accounts at the Vatican bank, police said.

A police statement said millions of euros in "false donations" from offshore companies moved through Scarano's accounts at the Vatican bank, formally known as the Institute for Works of Religion (IOR).

It said millions of euros worth of bank accounts and real estate holdings were being confiscated in a police operation in Salerno that coincided with the issuing of the arrest warrants.

Scarano worked for 22 years at a Vatican department known as the Administration of the Patrimony of the Apostolic See (APSA), which manages the Vatican's real estate holdings and financial and stock portfolios. It also acts as a purchasing and human resources department.

Through his position as a senior accountant at APSA, Scarano had ready access to the Vatican bank, where he held several accounts.

APSA is currently being investigated by the same outside accounting firm that is also helping the Vatican bank close accounts that could potentially be used for money laundering.

In Salerno, Scarano lived in a luxury, 17-room apartment decorated with original artwork worth some 6 million euros ($8.1 million), investigators told Reuters after his arrest last June.

He had been under investigation for months over the suspicious movement of some 590,000 euros in 2012 in one transaction from the Vatican bank, investigators said last year.

Well-connected in local high society circles, Scarano withdrew the money in one operation then divided the cash, most of it in 500 euro notes, among nearly 56 friends.

Each friend gave him a cashier's check drawn on Italian banks. He then took all the checks to a bank in Salerno and paid off a mortgage on his apartment, which investigators said last year he had purchased for about 1.7 million euros, according to Reuters.

Scarano denied the money laundering accusations when they were first made last year. He told investigators the money had come from "donations". Police, however, said on Tuesday that at least part of it came from offshore companies.

Scarano said last year that he took the money out of his Vatican bank account because he wanted to pay off his mortgage, sell his apartment at a profit and use the proceeds to build a home for the terminally ill.