The former governor of the southeastern state of Tabasco was placed under arrest Friday on suspicion of embezzling public funds, the Mexican Attorney General's Office said.
Andres Granier and several associates are under investigation in connection with the apparent disappearance of 1.91 billion pesos ($152 million) from state coffers during his 2007-2012 term.
The politician, who had been living in the United States for the past few months due to health problems, returned to Mexico this week vowing to clear his name.
He met with federal prosecutors on Wednesday.
"I did not instigate, formulate, carry out or cover up any actions or omissions that caused harm to the public coffers of Tabasco state or unduly enriched me," Granier, a member of Mexico's ruling Institutional Revolutionary Party, or PRI, said afterward in a statement released by his attorneys.
Granier, 65, was hospitalized early Friday for heart problems.
Federal agents were sent to the hospital to inform Granier that he was under arrest, Attorney General Jesus Murillo Karam said.
The federal prosecutors who questioned Granier earlier this week seemed more interested in the former governor's net worth than in his actions in office, defense attorney Eduardo Luengo said Friday.
Granier is anxious to "face the accusations" leveled against him by Tabasco state prosecutors, his lawyer said. EFE