Police arrested the wife of former Honduran President Porfirio Lobo on Wednesday on corruption charges including siphoning funds from social works programs for the poor, officials said.
Rosa Elena Bonilla was detained at her residence on the outskirts of the capital Tegucigalpa, officials said. Police also arrested her brother-in-law and seized documents pertaining to graft accusations.
Ana Maria Calderon, interim head of the Organization of American States' (OAS) Mission to Support the Fight against Corruption and Impunity in Honduras (MACCIH) said Bonilla and others had embezzled 16 million lempiras ($680,000).
"Mrs. Bonilla is accused, along with other former officials, ... having created a money laundering network to hide money from the state that was earmarked for social works," Calderon said.
Late last year, Bonilla denied the corruption allegations after voluntarily testifying before prosecutors in the case. Her lawyer did not immediately respond to a request for comment on Wednesday.
Calderon said Bonilla used part of the money to pay for family members' educational fees and personal surgeries.
Corruption scandals have led to a string of arrests in Central America in recent years, thanks to growing pressure from activists and backing from foreign powers.
Bonilla was detained a day after U.S. Ambassador to the United Nations Nikki Haley visited Honduras to talk about drug trafficking and corruption.
Among the funds suspected of being embezzled were about $255,000 donated by Taiwan in 2013 for medical equipment, building materials for poor families and job programs, officials said.
Bonilla is also being investigated by prosecutors for suspected anomalies in $330,000 that was designated for the purchase of shoes and uniforms for poor children, officials said.
Earlier this month, the head of an anti-corruption commission backed by the Organization of American States resigned, citing a lack of support from authorities.
Lobo was elected in late 2009 after a military coup ousted then-President Manuel Zelaya, and he served until 2014.
The couple's son, Fabio Lobo, was sentenced to 24 years in prison by a U.S. court last year after pleading guilty to charges of conspiring to import cocaine into the United States.