Updated

The mayor of Nogales was arrested Tuesday by FBI agents on multiple charges including bribery, theft, fraud and money laundering, Arizona's attorney general said.

Mayor Octavio Garcia Von Borstel, 29, was taken into custody at his office at Nogales City Hall. Search warrants were executed at his home, business and office.

The mayor's father, Octavio Suarez Garcia, 59, of Nogales, was also indicted and arrested Tuesday. He faces several charges that include fraud, theft and money laundering.

Both men pleaded not guilty Tuesday afternoon in Santa Cruz County Superior Court, and Justice of the Peace Mary Helen Maley set bond at $250,000 apiece. She also granted a motion from state prosecutors that would allow them 48 hours to investigate the source of any cash posted as bond, the Nogales International reported.

The men are scheduled to be arraigned Monday. Attorney General Terry Goddard called the charges serious.

"Because some charges involve the official actions of an elected official, they violate the public trust," Goddard said. "Both the mayor and his father will be held accountable and prosecuted to the full extent of the law."

Goddard told The Associated Press the indictments do not allege any connection to drug cartels.

"This indictment is specific to the activities of the mayor at the city and the business that was run by the mayor and his father," Goddard said.

Goddard's office said FBI agents began investigating Garcia Von Borstel five months ago and determined he was soliciting Nogales businesses as early as February 2009 to hire him as a business consultant.

At least one business admitted to the FBI that it was paying the mayor to use his official position to obtain business contracts and, specifically, to obtain new City of Nogales contracts, circumventing either open bidding or proper application processes.

A news release said further investigation determined the mayor also received money from at least one business in exchange for using his official position to protect a contract the business owner had with the city and to assist the owner in obtaining an additional city contract.

Goddard alleges the mayor's father, Garcia Suarez, was authorized to sell Western Union money orders from his money transmitter business in Nogales. The state claims Garcia Suarez fraudulently reported that Western Union money orders worth $3.2 million were sold though there were no cash deposits to back them up.

The money orders were then cashed by Garcia Von Borstel and deposited into a bank account he controlled.

Of the $3.2 million, the father and son withdrew $565,000 for their personal use before the account was frozen, prosecutors said.

Defense attorney Christopher Scileppi said the mayor and his father "look forward to clearing their names and aggressively defending themselves."

Outside the courtroom, Scileppi noted that Goddard is running for governor and the charges filed "could be a little bit of political grandstanding to bolster a lagging gubernatorial campaign."

There was no immediate response from Goddard. Assistant Attorney General Michael Jette, who is also prosecuting the case, declined to respond to Scileppi's comment.