Former Guatemalan leader Alfonso Portillo was arrested following a US extradition request related to charges of money-laundering during his 2000-2004 presidency, officials said.

Two days after police searched for him at two homes in Guatemala City, Portillo (58) was tracked down at the northeastern beach resort of Punta de Palma on the Caribbean coast, said Attorney General Velasquez Zarate.

Portillo was placed in jail by a court order, which gave the United States 40 days to present evidence to support its extradition request.

Guatemalan judicial authorities issued an arrest warrant for Portillo on Friday after US officials in Florida requested his extradition.

An indictment by a grand jury in New York on Monday said Portillo "embezzled tens of million of dollars worth of public funds, a portion of which he then laundered through bank accounts" in the United States and Europe.

Portillo had fled to Mexico in 2005 after losing his immunity from prosecution for alleged corruption during his administration. In October 2008, he was extradited from Mexico to Guatemala, where he has been awaiting trial on embezzlement charges.

Guatemala has accused Portillo of authorising some $15-million in transfers to Guatemala's Defence Department, where officials close to him allegedly took part of the money.

After his Tuesday arrest, Portillo told Sonora radio he was the victim of a conspiracy that began before he took office six years ago and that he feared for his life.

"When I am in court, I'll mention all the names of the people behind the conspiracy... everything they've done, where they met," he said in a telephone interview.

"With all they've done to me in Guatemala, anything can happen," Portillo said, adding that the extradition proceedings were a violation of national and international law.

"This is going to be a test for Guatemala's new judicial system that we want to set up with this new court," he added, referring to the Supreme Court of Justice.

The 16-page US indictment charges Portillo with using two national banks that he oversaw to make fraudulent transactions and embezzle money from the government "to enrich himself and his co-conspirators."

He then allegedly laundered this money through "various international bank accounts, including accounts located in the United States, through at least in or about 2006."

Portillo embezzled almost four million dollars from the ministry of defence and also stole donations from Taiwan to a programme known as Libraries for Peace, according to the indictment.

To launder money, Portillo moved funds around the world, including in Florida, Liechtenstein, London, Luxembourg, Paris and Switzerland, the charges allege.

US prosecutors said they were seeking forfeiture of any laundered money.

If found guilty, Portillo could be sentenced to a maximum of 20 years in prison and a fine of twice the value of the funds in the money-laundering transactions.

Guatemala so far has not convicted any of its former presidents charged with corruption and other crimes, including Romeo Lucas (1978-1982), who recently died in exile in Venezuela, and Jorge Serrano (1990-1993), currently exiled in Panama.

Before he was elected president, Portillo was charged with double murder in Chilpancingo, Mexico, but was never put on trial.