MEXICO CITY—Javier Duarte, the fugitive governor of Veracruz state who became the face of Mexico’s endemic corruption, was arrested in Guatemala on Saturday on charges of racketeering and embezzlement, Mexican officials said.

 

Mr. Duarte eluded authorities for almost six months after making his initial escape on a government helicopter in October, the same day authorities asked a judge for an arrest warrant, deeply embarrassing the Mexican government.

Guatemalan police captured Mr. Duarte in a hotel in the town of Panajachel, around 90 miles from Guatemala City, Mexico’s attorney general’s office said in a statement. Mexico will seek the former governor’s extradition, the statement said.

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Mr. Duarte left an economic disaster in Veracruz, Mexico’s third most populous state. Federal and state auditors can’t account for around $2.5 billion of government funds sent to the state during his six-year term, which ended in 2016. Federal investigators say Mr. Duarte was the mastermind behind a complex web of phantom companies that diverted millions of dollars of public funds. Mr. Duarte has said he is innocent of all charges.

Javier Duarte, former Mexican state governor who has been on the run for six months was arrested on Saturday, police said.

The handcuffed Javier Duarte (C), former governor of the Mexican state of Veracruz, is escorted by police following his arrest in Panajache municipality, Solola departament, Guatemala, 150 km west of Guatemala City on April 15, 2017.  Duarte, a fugitive from justice suspected of embezzling hundreds of millions of dollars, will be processed for extradition to Mexico. / AFP PHOTO / JESUS MIRANDA

Mr. Duarte’s arrest is a victory for President Enrique Peña Nieto and his ruling Institutional Revolutionary Party. The PRI, whose image has been badly tarnished by accusations of corruption—such as the ones against Mr. Duarte—faces state elections in June. Mr. Duarte belonged to the PRI until late October, when he was expelled from the party.

In November, Mexico offered a $810,000 reward for information leading to Mr. Duarte’s capture. It is not known whether the reward was paid.

His arrest comes just a week after the arrest in Italy of former Tamaulipas Governor Tomás Yarrington who is facing charges of money laundering and drug trafficking both in the U.S. and Mexico. Joel Androphy, a lawyer for Mr. Yarrington, says he is innocent and will fight the extradition requests that both countries are expected to file soon with Italian authorities.

A number of other Mexican former governors are fugitives, wanted in Mexico or the U.S. on charges ranging from money laundering to embezzling state funds.

Two, from the border states of Coahuila and Tamaulipas, have been indicted in the U.S. on money-laundering charges.

A third, César Duarte, the former governor of Chihuahua state, dropped out of sight in March after an arrest warrant was issued for him in Mexico on charges including embezzling. All the governors said they were innocent before vanishing.

The wave of scandals involving state governors have shocked even Mexicans, long used to government corruption, and raised the issue to the top of the national agenda. Last year, Mexico’s Congress passed new anti-corruption legislation, and a special anti-corruption prosecutor is expected to be named in the coming weeks.

Javier Duarte and his wife Karime Macías de Duarte with their two children. Neither child has been to school and no explanation has been given by either parent.

Corruption has become a leading issue in the run-up to June elections in the State of Mexico, the country’s richest and most populous state. The PRI, which lost Veracruz last year to the rival conservative National Action Party after 87 years of control, could also lose Mr. Peña Nieto’s home state, the State of Mexico, to political opponents, dealing a potential death blow to the ruling party’s hopes of retaining the presidency in the 2018 elections, analysts say.

In Veracruz, tax officials are investigating 33 shell companies that allegedly received some $175 million from top Duarte officials without providing the services or goods contracted.

Investigators believe front men in Mr. Duarte’s inner circle bought expensive ranches and apartments in Mexico and abroad with state funds, using more than one hundred banks account to erase the origin of the money, according to an official in the attorney general’s office.

Mr. Duarte also presided over an explosion of drug-related violence in Veracruz. Last year, homicides more than doubled from 2015 as drug cartels fought over turf and drug routes.


MEXICO CITY—While former Tamaulipas Gov. Tomás Yarrington was on the run last year from drug trafficking and money-laundering charges in Mexico and the U.S., he was assigned eight state policemen as bodyguards, according to documents reviewed by The Wall Street Journal.

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