Former President Ricardo Martinelli denies wrongdoing in the case, which involves the purchase of a Panamanian media conglomerate.
The 71-year-old, considered a frontrunner for the presidency in the 2024 race, was also handed a $19m fine at Tuesday’s sentencing.
The case against him centred on the purchase of a media company that prosecutors said was bought with funds funnelled from state contracts through a series of front companies.
“When politics enters through the door, justice goes out the window,” Martinelli said in a Twitter post on July 13, denouncing the case.
Martinelli has characterised the trial as a form of political persecution, and his lawyer said that he will appeal the sentence.
The case is known in Panama as “New Business”, the name of the alleged front company.
It collected approximately $43m from firms that received lucrative government contracts, and those funds were then used to buy a media conglomerate with control of several national papers, according to prosecutors.
Last month, Martinelli became the first official candidate to run in Panama’s 2024 elections, after being selected to represent Realizando Metas, a party he founded two years ago. He previously led Panama from 2009 to 2014.
Martinelli has been barred from leaving Panama due to the legal proceedings, and two of his sons previously served prison sentences in the United States for their involvement in money laundering schemes. They also face trial in Panama.
The elder Martinelli was himself extradited from the US in 2018, when he was accused of using public funds to spy on journalists and political rivals. A Panamanian court cleared him in 2021 after finding insufficient evidence. Martinelli and his sons are banned from entering the US.
On Thursday, the US also barred former President Juan Carlos Varela Rodriguez from entering the country due to his role in “significant corruption” while in office.
“Corruption unjustly deprives the people of Panama of quality public services such as schools, hospitals, and roads, hurting their economic prospects and their quality of life,” US Secretary of State Antony Blinken said at the time.
“If not addressed, corruption will continue to depress Panama’s prosperity, weaken its democracy, and prevent it from realising its full potential.”