The Rev Carlos Urrutigoity is still an active priest in the Ciudad del Este diocese, however, in a sign that he remains in good standing with his bishop.
Urrutigoity has denied allegations of impropriety and has never been charged, and his bishop, Monsignor Rogelio Livieres, has stressed that there is no accusation against him that he sexually abused minors.
But Urrutigoity's case re-emerged after Francis sent a team of Vatican investigators to the diocese this month to look into criticisms against Livieres by local residents and other Paraguayan prelates.
Urrutigoity had been a member of the schismatic, traditionalist Society of St Pius X He later joined the Scranton diocese in Pennsylvania and founded a priestly society where the old Latin Mass was celebrated.
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In 2004, though, Scranton Bishop Joseph Martino suppressed the society, citing financial instability and allegations of sexual misconduct against Urrutigoity.
Urrutigoity's subsequent re-emergence in Paraguay was documented by the online resource BishopAccountability.Org and the Global Post.
Lombardi also said that as a preliminary result of the Vatican probe, priestly ordinations in the diocese had been suspended.
Livieres, who is a member of the conservative Opus Dei movement, has defended his establishment of a new seminary and boasted about his record in finding new priestly vocations. But he has also acknowledged that other Paraguayan prelates have opposed his initiatives, apparently the primary reason for the Vatican investigation.