ROME – In a potentially important step in the Vatican’s ongoing press for financial reform under Pope Francis, two former officials of the Institute for the Works of Religion (IOR), the so-called “Vatican bank,” have been convicted by a court of the Vatican City State of financial mismanagement of investments reportedly involving almost $60 million in damages.

The verdict was confirmed late Tuesday in a brief statement from the IOR, released at 8:30 p.m. Rome time. Although that statement did not name the officials, it’s been widely reported in the Italian media, including by Avvenire, the official newspaper of the Italian bishops’ conference, that they are Paolo Cipriani, a former director of the bank, and Massimo Tulli, Cipriani’s former deputy.

“The court’s decision is the outcome of a civil liability action started by IOR in September 2014 supported by a comprehensive review of financial investments made by IOR before mid-2013,” the statement said.

Both Cipriani and Tulli resigned from the IOR in July 2013, shortly after the election of Pope Francis in March of that year, and both have been targets of mismanagement accusations, investigations and trials ever since.

A Roman court in February 2017 found both men guilty of breaking anti-money laundering laws, sentencing Cipriani and Tulli to four months and ten days of detention and a fine of $6,000. The case involved charges of not providing JP Morgan crucial information regarding three separate banking operations of approximately $140,000, $57,000 and $119,000, executed in 2010.

In late January this year, at the conclusion of a separate Vatican trial for the two ex-officials, a prosecutor asked for jail terms of one year for Cipriani and 10 months for Tulli, citing two suspicious transactions in 2010, which allegedly violated Italy’s anti-money laundering laws.

Since the era of Pope emeritus Benedict XVI, bringing the Vatican into compliance with accepted European anti-money laundering norms has been a top papal priority, both as a matter of internal reform and also to earn a spot on global “white lists” of virtuous financial actors. Failing to do so exacts a real-world cost on the Vatican, as it can be forced to pay higher transaction fees if parties to the transaction feel the need to perform additional due diligence out of concern about potential criminal and civil liability.

Benedict created a “Financial Information Authority” in the Vatican to enforce anti-money laundering regulations, a body that’s been strengthened and given an expanded mandate under Pope Francis, and Benedict also made the decision to subject the Vatican to the Moneyval process, meaning periodic reviews by the Council of Europe’s top anti-money laundering watchdog agency.

In 2010, the Bank of Italy essentially told major Italian banks to stop working with the IOR out of concern over its compliance with anti-money laundering norms, and in 2011 it declared the IOR a “non-EU” bank, temporarily compelling the Vatican to shift some of its banking business to other nations.

In January and February 2013, the Bank of Italy also froze all credit card and ATM transactions inside the Vatican City State over the same concerns, temporarily turning the Vatican into a largely cash-based economy.

Those moves were lifted in January 2014, after Francis and his advisers persuaded the Bank of Italy that the Vatican was taking steps to fully enforce “best practices” in terms of anti-corruption and anti-money laundering measures.

Last November, another official within the IOR with links to Cipriani, Giulio Mattietti, who held the title of deputy director general, was removed from his position and physically escorted off Vatican property by security agents.

The Vatican court that found Cipriani and Tulli guilty has yet to reveal the basis for its conclusions, which is expected to be issued within a month.

In its statement, the IOR hailed the Vatican verdict as confirming “IOR’s will to pursue, by judicial proceedings, any misconduct carried out to its detriment, no matter where and by whom.”

“This ruling is an important step illustrating the significant work of IOR senior management over the last 4 years to transform the Institute,” the statement said.

“It demonstrates IOR’s continuing commitment to strong governance, transparency to its operations and its determination to meet best international standards.”