SATURDAY: Paniagua's suspension was due to "falsified documents," Badler hears from MLB vice president Kim Ng. The league is still investigating the matter and hasn't made a final ruling on Paniagua's status. Ng notes that Paniagua's representatives are asking the league to reconsider the initial decision and that while the right-hander is unable to sign with any team for a year, Paniagua isn't technically "suspended" since he isn't under an official contract yet.
THURSDAY: Major League Baseball has voided the $1.1MM contract of Yankees pitching prospect Juan Carlos Paniagua and suspended the right-hander for one year, according to Ben Badler of Baseball America. MLB hasn't specified — even to the Yankees — why Paniagua has been suspended, but "one-year suspensions are usually reserved for a player who presents false information to teams about his age or identity," writes Badler.
Paniagua is no stranger to these circumstances. The Diamondbacks signed him — then going by the name Juan Collado — for a mere $17K in May 2009. While that contract was under review, Paniagua was allowed to play in the Dominican Summer League under a rule that's since been changed, and he impressed scouts with a big fastball. The contract with Arizona was voided and Paniagua was suspended in June 2010. When that suspension was lifted in March, teams were lining up for his services, with the Yankees placing the winning bid.
His contract once again was pending MLB's review since signing with the Yankees, and he has not played in any games during that time. We can't say for sure why Paniagua was suspended, but Nick Piecoro of the Arizona Republic speculated in March that the hangup may have been regarding Paniagua's birthday, which he didn't amend even when he came clean about his name:
There still is a lot of skepticism about whether he’ll actually get off the island and into the U.S. The fact that he changed his name, but not his birthday, is a red flag.