An Italian financier facing probes by Vatican and Roman prosecutors has been arrested in London, British court officials said Wednesday.

Gianluigi Torzi, 42, was apprehended by London police on Tuesday, and appeared at Westminster Magistrates Court "following a warrant issued from Italy", a court official told AFP.

Prosecutors in Rome issued that arrest warrant on April 12 for alleged money laundering and fake invoicing. 

Torzi is believed to have a residence in London.

"Full bail arguments were heard. He was remanded in custody until May 18," the court official said, adding that a date for an extradition hearing was expected to be determined then.

Torzi was arrested and later released on bail by Vatican authorities in June 2020, on charges of extortion, embezzlement and aggravated fraud linked to a controversial real estate deal.

Vatican authorities allege that Torzi made an illegal profit of 15 million euros ($18.2 million) while acting as a go-between in a Vatican investment on a luxury property in central London. 

The 2018 real estate operation underscored the opaque financial dealings of the Vatican's central administration, the Secretariat of State, which Pope Francis has been trying to clean up. 

An account published on the Vatican website just after his arrest alleged that Torzi had fraudulently acquired voting rights in a company that controlled the London property in 60 Sloane Avenue.

He then demanded large sums of money from the Vatican to cede these voting rights, worth some 15 million euros in early 2019, according to the Vatican account.

The Vatican obtained a court order freezing his assets in London but an English judge overturned it in March, claiming there was insufficient evidence of criminal wrongdoing.

Last month, Italian authorities said they had taken a cue from the Vatican investigations and uncovered new evidence of fraud unrelated to the real estate transaction.