Two officials from the Vatican's paediatric hospital went on trial on Tuesday on charges of expropriating over 422,000 euros of hospital funds to refurbish the Vatican's retired second-in-command's apartment.

During Tuesday's hearing the Vatican tribunal rejected arguments by lawyers for former hospital president Giuseppe Profiti and ex-treasurer Massimo Spina that it had no authority to prosecute activities of a hospital foundation that was located in Italy, not the Vatican.Judge Paolo Papanti-Pelletier set new hearings for September 7-9. Prosecutors accuse Profiti and Spina of illicitly paying the Bambin Gesu foundation funds to Gianantonio Bandera, owner of the the Castelli Re building company.The defendants face charges of between three to five years in prison and fines upwards of 5,000 euros if they are found guilty of embezzling the hospital donations. 

Profiti's lawyers claim the funds used to spruce up former Vatican Secretary of State Cardinal Tarcisio Bertone's 300 square-metre flat were an investment, as he intended to use it for future fundraising events for the hospital.When the scandal broke in 2015, Bertone made a 150,000 euro 'donation' to the hospital for research and claimed he was unaware the foundation had paid for the renovation of his flat, work on which Bertone also spent 300,000 euros of his own money.Bertone was not charged or probed over the case despite having personally benefitted from the diverted Bambin Gesu funds.Bandera, a longtime Bertone associate, was also spared.