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The justice system of the Ortega-aligned dictatorship has convicted Bayardo Arce Castaño, former presidential adviser for Economic Affairs, of the alleged crime of “money laundering, in the form of defrauding the State of Nicaragua,” according to a statement from the Attorney General’s Office (PGJ). In addition, all of his companies were shut down and all of his assets confiscated.
Arce’s executive assistant, Ricardo Bonilla Castañeda, who has worked with the former Sandinista commander in party and government roles over the past 30 years, was also sentenced for the same alleged offense.
Both Nicaraguans were convicted by the Ninth District Criminal Trial Court of Managua, under ruling No. 01-2026.
According to the text, Articles 282 and 283 of the reformed Criminal Code and other applicable special legislation were applied to Arce and Bonilla.
The statement does not specify the sentence imposed on Arce and Bonilla. However, under Nicaraguan law, the crime of money laundering is punishable by seven to fifteen years in prison, disqualification from exercising a profession or trade for the same period, and a fine of up to three times the value of the laundered assets. Penalties increase when the assets originate from serious crimes such as terrorism, drug trafficking, or organized crime, in which case the sentence rises to between seven and twenty years in prison.
The conviction of Arce and Bonilla comes three days after sources close to Arce’s family, now in exile, spoke with CONFIDENCIAL and other national and international media to denounce abuses and the total isolation of the former guerrilla commander in the “La Modelo” prison.
The alleged Bayardo Arce scheme
According to the Attorney General’s Office (PGJ), it was established that the accused used “multiple commercial companies, bank accounts, and financial operations to conceal the origin and destination of the money.”
The press release states that 49 companies were identified—35 of them allegedly used to channel “illicit capital flows” derived from tax evasion—through which, by means of “fictitious loans and international transfers” to Panama and the British Virgin Islands, as much as 2.71358 billion U.S. dollars and 82.3448 billion córdobas were allegedly laundered.
The companies were managed through employees and third parties acting as “front partners” in order to “hide the true beneficiaries,” the PGJ said.
The statement also named Bayardo Arce’s wife, Amelia Ybarra-Rojas, and his brother-in-law, Amílcar Manuel Ybarra-Rojas, president of the board of directors of Agricorp, as “co-perpetrators” of the same crimes.
According to the newspaper La Prensa, both siblings left Nicaragua in late December 2025 for Costa Rica after the Attorney General’s Office summoned them over alleged “money laundering” accusations.
“The Ybarra siblings are currently fugitives; therefore, the criminal case against them remains open, in accordance with our criminal procedural legislation,” the PGJ reported.
Detained since July 2025
Bayardo Arce was arrested on the night of Wednesday, July 30, 2025, when dozens of police officers from the Special Operations Directorate (DOE) raided his home in southern Villa Fontana, Managua, and transferred him to the National Penitentiary System.
Bonilla was summoned to the Attorney General’s Office on Saturday, July 26, 2025, and has remained detained at “La Modelo” prison since that day. Ajax Delgado, a business partner of Arce in several ventures, and former Supreme Court Justice magistrate Gerardo Arce, Bayardo’s brother, were also summoned and appeared before the PGR. After questioning, Delgado and Arce were released.
That same Saturday night, police removed the former presidential adviser’s police escort from his home and evicted the private security guards from his offices in the El Carmen neighborhood, which were then placed under police control.
Former FSLN lawmaker and Ortega adviser
Bayardo Arce served as a deputy in the National Assembly for the Sandinista National Liberation Front (FSLN) for ten consecutive years, from 1997 to 2007.
That changed in early January 2007, when Ortega assumed the presidency of Nicaragua and appointed Arce as his economic adviser, a role that gave him prominence in coordinating the economic cabinet and in relations between Ortega’s government and major private-sector business leaders.
However, he began to be sidelined from the start of Daniel Ortega’s third consecutive presidential term (2017–2021), during a period of uncertainty over his role and rising prominence of Murillo, who by then was already vice president. Despite this, the former member of the historic FSLN leadership remained in the position of presidential adviser on Economic and Financial Affairs, a role he still holds formally.
In the political sphere, Bayardo Arce served as the FSLN’s party representative at the Supreme Court of Justice from 1997, when the FSLN was still in opposition, until he was removed from that role following an intervention ordered by Rosario Murillo in October 2023, and replaced by Fidel Moreno, the FSLN’s organization secretary.
Before being sent to La Modelo prison, Arce was the third former member of the FSLN National Directorate on whom the “co-presidents” had imposed a de facto house arrest, along with former revolutionary commander Henry Ruiz Hernández (“Modesto”).
Another former member of the FSLN National Directorate, Humberto Ortega Saavedra—former head of the Army and brother of Daniel Ortega Saavedra—died on September 30, 2024, as a “political prisoner,” after being arrested and isolated in his home for questioning Ortega’s dynastic succession in favor of Murillo.
