The pontiff made the apparently unscripted comments in a private morning Mass inside his home at the Vatican.
According to Vatican Radio he said: "There are those who say 'I am very Catholic, I always go to Mass, I belong to this and that association," but in reality, "my life is not Christian, I don't pay my employees proper salaries, I exploit people, I do dirty business, I launder money, a double life'.
"There are many Catholics who are like this and they cause scandal.
"How many times have we all heard people say 'if that person is a Catholic, it is better to be an atheist'."
He also singled labelled clergy who abuse children as being part of a "Satanic Mass", warned cardinals not to believe they were any more important than other people just because of their position, and said Catholics who're part of the Mafia have effectively left the Church.
Meanwhile two former officials at the Vatican bank have been sentenced to jail for financial impropriety.
AP reports that Paolo Cipriani and Massimo Tulli were given four months in prison each after being unable to provide documents explaining substantial financial transfers.
The men, who resigned from their positions at the Institute for Religious Works at the Vatican in 2013, denied the charges against them and plan to appeal.
The sentences come after the Vatican froze more than €2 million worth of assets last week, amid accusations of money laundering.
