Dante explores the numerous circles of Hell in this story, in each of which a different sin is relegated. Throughout the story we have seen the punishments for a number of terrible sins, and in Canto 18, we come to the area where fraud is punished. The eighth circle of Hell, one of the worst, holds the eternal punishment for sinners guilty of fraud.
Within this circle is the priest, normally considered a holy man, and Dante is shocked to find a clergy member here in Hell. However, this gets to the heart of sin—that anyone can fall deeply into it. The priest is guilty of defrauding his congregation, and this is what Dante wants to comment on in the Catholic Church. He is angered at the amount of deception in the church and wants to condemn it in this work.
Dante’s 18th Canto in this work explores the eighth circle of Hell, where those who sinned by fraud are sent after death. He has the circle divided into three groups for various types of fraud and their associated punishment. It is in this circle that he comes across a priest.
Dante is criticizing the Catholic Church for their fraud and their attempts to take advantage of and mislead their parishioners. The priest in Hell is guilty of having defrauded his laypeople and led them astray. It is one of the vilest things, according to Dante, to defraud someone in some way, and it is worse for the church to defraud its followers. The eighth circle is second to last, showing how despicable and villainous the priest is.
Dante writes about the eighth circle in the eighteenth canto of his Inferno. Here those who sinned by deception are cursed to stride continuously in horrible conditions, whipped by a demon to keep moving. Dante recognizes four people within this circle, but none of them is identified specifically as a priest. However, he does mention that there are shades covered in excrement so that they cannot be recognized as either priest or lay-person.
One such shade is Alessio Interminei of Lucca, a member of Dante's despised Guelph party. Throughout the cantos, Dante makes his disdain for the Church known, and this canto is another reminder. The particular ravine that Alessio resides in is filled with sewage, perhaps implying that clerics belong in the gutter. This is also a place for flatterers and liars, euphemistically surrounded by their own waste. Dante seems to be telling us that he believes that what is said by this Guelph aristocrat—as well as by Church leaders—is only as good as their own feces.
Canto 18 is about those who have been condemned to hell for fraud. There isn't an obvious priest character in this section—I think you may be referring to Alessio of Lucca, whom Dante says is so covered in grime that it was difficult to tell "if he were clerk [a priest] or layman." In fact, Dante identifies him as Alessio of Lucca. Very little is known of this character, except that he was a member of the Guelph Party, who supported the Pope as opposed to the Holy Roman Empire.
In this canto, Dante identifies his sin as that of flattery. Alessio himself confesses that he was unable to stop himself from expressing flatteries, with the result that he has "sunk low" because of this behavior. Presumably, Alessio was known at the time of writing as a notorious flatterer; this reputation has not survived him except through this text, but evidently Dante viewed flattery as a behavior to be frowned upon.