By Janet Tappin Coelho

A video shows the scandalous moment Brazilian police discover wads of cash stashed behind a false wall in a bedroom cabinet as the Catholic church was rocked by allegations of misappropriation of funds by a bishop and several priests.

The Bishop of Formosa, Jose Ribeiro, along with five clergymen and three lay people were detained in prison in Goiás this week charged with embezzling over 2 million reais ($603,000/£426,000) from church funds.

It’s alleged the money was stolen over a three-year period from tithes, donations, fundraising events and from fees collected for ceremonies such as baptisms and weddings.

According to state prosecutors, the bishop, who was appointed to the Formosa diocese in 2014, is suspected of leading a sophisticated scheme that diverted funds from church coffers.

Phone taps uncovered the alleged web of deceit with conversations apparently revealing how the group laundered the money by purchasing a cattle ranch, a lottery agency, mobile phones, luxury cars, designer watches and gold chains. Large amounts of cash were also found in foreign currency.

Pic by Formoso Diocese/Caters News

Prosecutor Fernanda Balbinot, said: “There were indications the money was used for personal expenses and that cars from the Formosa diocese were used for private purposes.

“Instead of presenting tax bills and expense receipts with the correct amount, documents were allegedly produced saying there was nothing to declare.”

The investigation is reported to have also uncovered evidence that priests, involved in the scheme, paid the bishop a monthly ‘protection allowance’ of between 7,000 to 10,000 reais ($2,100 to $3,000/£1,500 to £2,100) to keep their jobs.

Prosecutor Douglas Chegyry said to Brazilian media: “The information we have obtained is that in order to remain in the more profitable parishes that generated more money, the priests paid a cash allowance to the bishop.”

In the raid on the home of one of the accused, Monsignor Epitácio Cardoso Pereira, who is seen wearing a striped blue tee shirt in the footage, agents used a penknife to prise open the fake panels to discover 90,000 reais ($27,160/£19,200) in plastic bags hidden in a secret storage space.

They also seized three iphones, a macbook and found more money hidden in draws around the home which the defendant claimed did not belong to him.

Cops were later filmed taking hours to count the haul.

The investigation into the Formosa Diocese accounts began last year after members of the congregation alleged irregularities and misuse of assets by the Catholic Church.

Churchgoers also claimed the expenses of the episcopal house rose disproportionately, from 5,000 reais to 35,000 reais ($1,500 to £10,000/£1,000 to £7,500) following the arrival of Bishop Ribeiro. At the time, the cleric denied any wrongdoing.

Prosecutors have charged the defendants with misappropriation, money laundering, “ideological falsehood” and criminal association.

Lawyers for the accused refute the charges and said they will prove their clients innocence.

Two days after the arrests, Pope Francis named Father Paulo Mendes, who is archbishop of Uberaba, as a temporary replacement in the Goiás diocese which has 33 churches distributed over 20 parishes.