La Paz, Bolivia – Former Bolivian President Luis Arce Catacora has been ordered to remain in detention for five months while prosecutors investigate allegations that he embezzled millions of dollars from a fund created for Indigenous and peasant development projects.

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Judicial Decision and Charges

Arce, who stepped down just a month ago, appeared before Judge Elmer Laura in a virtual hearing on Friday, two days after being arrested in La Paz. The judge rejected appeals from Arce’s legal team for his release and cited the seriousness of the charges, which he said “directly affect state assets and resources allocated to vulnerable sectors.”

The allegations focus on Arce’s time as economy minister under former President Evo Morales (2006–2017), during which authorities claim he oversaw the diversion of approximately $700 million from a state fund designed to channel natural gas revenues into development projects for Indigenous peoples and rural communities.

Interior Minister Marco Antonio Oviedo called Arce “the principal person responsible” for approving transfers of large sums into personal accounts of government officials for projects that were never completed.

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Arce Denies Wrongdoing

During the hearing, Arce denied personal involvement and claimed the case was politically motivated. “I’m a scapegoat,” he told the judge. His lawyers also requested his release on health grounds, citing a previous battle with kidney cancer, but the request was denied.

No trial date has yet been set. If convicted, Arce faces up to six years in prison.

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Political Context

The case dates back to 2015, when the Indigenous fund was shut down amid corruption allegations. Investigations stalled under the Movement Toward Socialism party but were revived after conservative President Rodrigo Paz took office last month, ending nearly two decades of left-wing rule.

President Paz campaigned on promises to root out corruption at the highest levels amid Bolivia’s worst economic crisis in 40 years. Vice President Edmand Lara celebrated Arce’s arrest on social media, declaring that “everyone who has stolen from this country will return every last cent.”

Meanwhile, former ministers and members of Arce’s party have condemned the arrest as political persecution.