Former Nicaraguan President Arnoldo Aleman was convicted on corruption charges Sunday and sentenced to 20 years imprisonment and a $10 million fine.

Former Nicaraguan President Arnoldo Aleman attends a mass for his son Arnoldo Jose Aleman in Managua's Cathedral in this October 23, 2002 file photo.  [AP]

Aleman was accused of illegally diverting some $100 million in government funds to his party's election campaigns during his tenure in office, which ended in January 2002.

It is the first time a former president has been convicted in Nicaragua. Police used tear gas to disperse rock-throwing protesters outside the courthouse.

During the sentencing, Judge Juana Mendez cited crimes of fraud, misappropriation of public funds, embezzlement, criminal association and electoral violations endangering the state.

Mendez described how Aleman and officials high up in his administration formed corporations in Panama where public funds from Nicaragua were laundered and mixed with political donations. The sentence said money laundering operations were organized from Aleman's residence outside Managua.

"The money was used for the benefit of Aleman and his family and electoral campaigns of the Liberal Constitutional Party," Mendez said.

Mendez also stripped Aleman of his ability to serve in congress and imposed a fine of $10 million.

Aleman, 57, has been diagnosed with diabetes, hypertension and heart problems and is likely to serve his sentence at his El Chile ranch 17 miles south of Managua because of health concerns.

During his trial, Aleman continued to direct affairs of the center-right governing party from jail by cellular phone and later received government officials as visitors under house arrest.

On Sunday, the judge described how Aleman took money from the treasury to buy a helicopter for $1.8 million and later rent the vehicle to a government agency.

President Enrique Bolanos — once Aleman's vice president and hand-picked successor — took office promising to stamp out corruption, a campaign that placed him at direct odds with Aleman.

Aleman became a senator upon leaving office but was stripped of the immunity from criminal prosecution that is normally extended to lawmakers.

The judge's decision in late November to release Aleman from jail to a house arrest during the trial provoked international concern that the judicial process had been compromised.

The U.S. State Department called it "a politically manipulated decision" and said that the Nicaraguan judicial system was "widely recognized as corrupt and politicized."

The Nicaraguan Supreme Court warned the United States to stay out of its business. The United States then suspended assistance to Nicaragua's judiciary.

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