Controversial lay group in Peru denies charges of tax dodging, fiscal fraud

ROME – A controversial lay movement in Peru facing multiple charges of abuse, whose founder was recently expelled as part of an ongoing Vatican investigation, has rejected charges that its financial operations are not only also suspect, but that they might put a key church-state accord at risk.

Concerns about financial irregularities against the Sodalitium Christianae Vitae (SCV), founded by layman Luis Fernando Figari in 1971, were among the motives that led Pope Francis to dispatch his primary investigative team, Maltese Archbishop Charles Scicluna, adjunct secretary to the Vatican’s Dicastery for the Doctrine of the Faith (DDF), and Spanish Monsignor Jordi Bertomeu, an official of the dicastery, to Lima last year to open a probe.

Those concerns include the possible exploitation of the concordat, a church-state agreement granting tax exemptions to Catholic charities and missions, which has now been put under a microscope as a result of financial accusations against the SCV.

In response to a Crux request, however, a spokesman for the SCV denied any wrongdoing, adding that a preliminary investigation by Peruvian prosecutors opened in February 2018 regarding alleged financial irregularities closed eight months later with no finding of fraud — a decision, he noted, with which Peru’s tax authority concurred.

Another investigation into economic activities by SCV members and a third party launched in April 2023 remains open, spokesman Daniel Calderon told Crux, saying, “We maintain our full cooperation with the authorities in compliance with the law.”

The concordat

Signed on July 26, 1980, the “concordat” is an official bilateral agreement between the Holy See and the Republic of Peru which manages the relationship between the country and the Catholic Church.

Among other things, the agreement offers a series of benefits to the church, including tax exemptions for entities such as Catholic missions and charitable projects and initiatives, such as schools, hospitals, and other social works. It also stipulates that the stipends of personnel and workers of the church are not a salary, and thus not subject to income tax.

Under the concordat, whatever profit the church earns must be reallocated to social and charitable works that benefit Peruvian society. According to Peruvian journalist Paola Ugaz, however, who has been a protagonist in bringing charges against the SCV to light, this reallocation has not happened in the movement’s case.

Speaking to Crux, Ugaz referenced her decade of investigation into the SCV’s financial network, saying the group built an economic portfolio believed to be worth hundreds of millions, in which both the money-making projects and the companies that received the profits were owned and managed by members of the SCV.

SCV cemeteries

According to Ugaz, the SCV has run various money-making activities throughout the years, such as selling books and CD players, running mines, schools, and agricultural companies, and selling real estate and select internet and website services, including the establishment of the website for the Archdiocese of Lima under the then-Archbishop of Lima, Cardinal Juan Luis Cipriani.

However, the “hen that laid the golden egg” for the SCV, she said, was its project involving cemeteries.

In total, Ugaz said that SCV-run companies established nine cemeteries in dioceses and archdioceses throughout Peru, structuring them as “missions” donated to the diocese, while maintaining administrative and financial control.

By structuring the cemeteries as “missions,” this legal status guaranteed they received tax exemptions for funeral and burial services, generating up to 30-40 percent more profit.

In the church’s Code of Canon Law, a “mission” is defined as a place where religious activities take place but does not yet have the characteristics of a parish. What a “mission” specifically consists of is not clearly defined in canon law, but the term is usually applied in traditional missionary contexts, such as remote communities of the Amazon.

It is considered unusual for the designation to be given to a cemetery, and observers say the decision to do so would have required approval at some level in the Vatican.

The first SCV-run cemetery was established in the Diocese of Lurín in the early 2000s by then-Bishop José Ramón Gurruchaga Ezama, in partnership with two SCV-run organizations: the Asociación Civil San Juan Bautista (ACSJB) and the Saint Ignatius Foundation (Fundación San Ignacio), which together established the “Catholic Mission Cemetery Park of Remembrance.”

Ugaz said the ACSJB maintained 50 percent control of the cemetery and sold the other 50 percent to the Saint Ignatius Foundation – established in Panama in 1997 under the name of “Pusan” by SCV priest Jaime Baertl before it was later renamed.

The dioceses, Ugaz said, received “not even a percentage” of the direct profits, with the understanding that should the bishop need funds, SCV members or individuals would contribute.

A contract dated in June 2000, which Ugaz has previously published, shows that SCV members involved in the Lurín deal included Baertl, Juan Carlos Len, Raúl Guinea Larco, and José Ambrozic and Eduardo Regal, both of whom are being investigated by the Vatican over allegations of abuse coverup, the obstruction of justice, and financial corruption.

Another cemetery was established in the Archdiocese of Piura, which until April was led by SCV member and former president of the ACSJB, José Antonio Eguren Anselmi.

In addition to Lurín and Piura, other SCV cemeteries, according to Ugaz, were located in Arequipa, Tacna y Moquegua, Ica, Carabayllo, Puente Piedra, Ancón, and Callao.

Cardinal Lluís Martínez Sistach, Archbishop emeritus of Barcelona and at the time archbishop of Tarragona, and Carlos Valderrama, head of the Peru-based Institute of Ecclesial Law, advised the SCV on its mission-cemetery model.

Ugaz told Crux that Italian Cardinal Gianfranco Ghirlanda, a Jesuit, an expert canonist and a close papal ally who in 2019 was tapped by Pope Francis to oversee the reform of SCV’s formation process, also advised the SCV in 2000 on the canonical aspects of the cemeteries’ standing as missions.

In a comment to Crux, however, Ghirlanda denied having played any part, saying, “I was never part of any commission to study cemeteries as ‘missions’ for the Sodalitium Christianae Vitae. This is a fake news.”

He said that he never assisted them in financial matters as he has “no expertise” in the area, but that in 2019 on behalf of the Vatican’s Dicastery for Religious he helped the SCV draft new governing constitutions as well as a document outlining the formation of members, Ratio Formationis.

These documents, he said, will be submitted for approval in the SCV’s general assembly in January 2025.

“I would like to say that I have always encountered the greatest collaboration and docility on the part of both the commission for the revision of the constitutions and that for the formation and Ratio Formationis, therefore the will to renew itself,” he said.

According to Ugaz, the investigations launched against the SCV by a Peruvian prosecutor in 2015 prompted the SCV to initiate a series of changes which culminated in what was essentially a reversal of the cemetery contracts, in which ownership of the cemeteries was returned to the ACSJB. The operation, she said, means the cemeteries are no longer designated as “missions” covered by the concordat.

Calderon, however, noted that in the Peruvian system, a “preliminary investigation” does not imply any finding of guilt, but rather represents an initial review to determine if there are elements of a crime.

Ugaz said the SCV’s ability to assemble its empire was aided by a host of prominent Peruvians perceived as friends of the movement, including one former president of the country and the daughter of another.

However, according to Ugaz, after negative media reports and the infamous Panama Papers scandal in 2016, the SCV relocated its companies. As of that year, she said, their Panama-based company, the Saint Ignatius Foundation, “disappeared” and two other “offshores” appeared registered in Denver, Co.

One of these companies, the Santa Rosa Foundation, was established in Denver in 2016 and is dedicated to providing “general support to SCV Catholic communities in various countries.” Another SCV holding company, Providential Inc., was established in Panama in 2007, but a request to transfer it to Colorado was made in 2016 and accepted in March 2017, according to a notarized letter that Crux has seen.

The SCV has also faced allegations of land trafficking in Piura and the legal harassment of peasant farmers in Catacaos by companies affiliated with the SCV.

In comments to Crux, Percy García Cavero, a lawyer for the ACSJB, denied allegations that they were attempting to evade taxes, saying they own several cemeteries and had proposed to several bishops the idea of creating the cemeteries as missions “in order for local churches to have their own cemeteries and to carry out active evangelization from them.”

After consultations with Sistach and the Institute for Ecclesiastical Law, he said, the mission-cemeteries were created and entrusted to the SCV “so that it could fulfill its purpose of ensuring their sacred nature” through a board of directors that they appointed.

The donation of the cemeteries to the dioceses was “made under certain contractually stipulated conditions,” García Cavero said, which he did not specify, but which if unmet would result in the reversal of the donation.

García Cavero said there was no need for the ACSJB to avoid paying taxes, since as a non-profit entity they are already exempt from income tax. He also said that burial assignments are exempt from sales tax by the SUNAT, Peru’s national tax oversight authority, and that the owners of a cemetery legally have no right to a tax credit.

García Cavero said the return of the cemeteries to the ACSJB began in 2019 after the pontifical delegates overseeing their reform process, which included Ghirlanda, recommended that the SCV cease administration of the cemeteries due to the “process that the Sodalitium was undergoing,” and that as a result, “They communicated this to the bishops who created the missions, who saw it prudent to begin a process of their extinction.”

He insisted that the ACSJB, which has threatened legal action against Ugaz for her reports on the cemeteries as recently as this month, “has not made any economic or legal use of the concordat to stop paying taxes.”

Concordat under a microscope

Yet according to Ugaz, the controversies involving the SCV prompted the state Attorney General’s Office to open an investigation in 2015 into “the entire economic movement” of the SCV.

“It’s a big slap in the face to the Peruvian Episcopal Conference that they’ve let everything happen, and that there have been these archbishops who haven’t done absolutely anything. It’s very serious,” she said.

Ugaz voiced her belief that part of the reason Pope Francis sent Scicluna and Bertomeu to investigate the SCV is to put the concordat “in safekeeping, because the bad practices of the [SCV] put it at risk.”

In 2023, the Peruvian state prosecutor opened a preliminary inquiry into three SCV members for alleged money laundering with offshore companies established in Panama and the British Virgin Islands with the help of a law firm whose alleged illegal activity was revealed in the Pandora Papers in 2021.

Those companies include San Jose Investments, the now Denver-based Providential Inc., and Alma Minerals Limited, an SCV mining company located in the British Virgin Islands.

The SCV members being investigated include Luis Baertl Jourde, cousin of Father Jaime Baertl; Juan Carlos Len; and Carlos Neuenschwander.

Some observers believe that as a result of the financial allegations against the SCV and the risk those allegations have posed to the concordat between the Peru and the Holy See, the Vatican could potentially issue new legislation governing how Catholic orders and communities operate financially, and how they answer to Rome.

In comments to Crux, Calderon said the SCV “was entrusted with the administration of four cemetery missions of four different ecclesiastical jurisdictions until 2021, when they were closed.”

“They were perfectly constituted civilly and canonically,” he said, and, referring to the allegations of profiteering and sending money to offshore accounts, he said, “The surpluses of these missions were always applied to the benefit of the mission of the church inside and outside of Peru, so there was never an abuse of the concordat.”

Follow Elise Ann Allen on X: @eliseannallen