Panamanian officials say former Vice President Felipe Virzi has been detained while prosecutors investigate him for alleged corruption in connection with a costly irrigation project that was never completed.

The 71-year-old Virzi was one of two vice presidents during the 1994-99 government of President Ernesto Perez Balladares and is seen as close to former President Ricardo Martinelli, who himself is being investigated for possible corruption during his 2009-14 government.

The case against Virzi is related to an alleged $10.2 million payment he received from an Ecuadorian company after it won a $37.4 million contract in 2012 to build an irrigation project in central Panama.

Prosecutors allege that Virzi distributed some of the money to businessmen and political allies of the president. Virzi rejects the accusations against him.