Vatican City: Pope Francis named one of Italy's leading anti-Mafia prosecutors as president of the Vatican's criminal tribunal, just as a new scandal erupted over alleged financial wrongdoing in the heart of the Holy See.

Giuseppe Pignatone. Credit:YouTube

The appointment of Giuseppe Pignatone came two days after Vatican police raided the Apostolic Palace and seized documents and computers from the secretariat of state. Also searched were the offices of the Vatican's financial watchdog agency, which is tasked with flagging possible money laundering and other suspicious financial transactions.

A Vatican source familiar with the case, speaking on condition of anonymity because he wasn't authorised to reveal details, said the transactions concerned efforts by the secretariat of state to sanitise a botched, money-losing real estate deal in London that originated during the previous pontificate.

L'Espresso magazine, meanwhile, reproduced what it said was a Vatican police directive announcing the precautionary suspension of five Vatican employees involved in the transactions.