( CNN ) -- The mayor of Nogales , Arizona , was arrested Tuesday on charges he took bribes to protect contracts or obtain business contracts with the city , the state attorney general said . Octavio Garcia-Von Borstel , 29 , of Nogales , was arrested at his office at city hall , according to the Arizona attorney general 's office , which announced the arrest and an indictment on state charges . Search warrants were executed at the mayor 's home , business and city hall office . The mayor is also accused of money laundering , conflict of interest , illegally conducting an enterprise and fraud . The mayor 's father , Octavio Garcia Suarez , 59 , of Nogales , also was indicted and arrested . He faces several charges that include fraud , theft and money laundering , the attorney general 's statement indicated . `` Both the mayor and his father will be held accountable and prosecuted to the full extent of the law . '' Attorney General Terry Goddard said . A spokeswoman for the city said Garcia-Von Borstel , who has been in office since April 2008 , was taken into custody around 9:30 a.m. Santa Cruz County Justice Court Judge Mary Helen Maley set bond at $ 250,000 , a clerk said later Tuesday . The mayor 's next hearing was scheduled for October 4 . The Federal Bureau of Investigation 's Southern Arizona Corruption Task Force assisted in the investigation in the border city . FBI spokesman Special Agent Manuel Johnson in Phoenix would not elaborate on the case . According to the statement , FBI agents began investigating Garcia-Von Borstel five months ago and determined that he was soliciting Nogales businesses to hire him as a business consultant as early as February 2009 . 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 , the attorney general stated . Further investigation determined the mayor also received money from at least one business in exchange for utilizing his official position to protect a contract the business owner had with the city and to assist the business owner in obtaining an additional city contract , added Goddard , who is running for governor . The indictment cites $ 4,000 and $ 2,000 payments , without providing details . The mayor 's father , Garcia Suarez , was an agent for Western Union authorized to sell Western Union money orders from his money transmitter business , ACE Cash Express , in Nogales , officials said . The state alleges that Garcia Suarez fraudulently reported that Western Union money orders worth $ 3.2 million were sold , although 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 , the statement said . Of the $ 3.2 million , the father and son withdrew $ 565,000 for their personal use before the account was frozen , it said . A phone message and e-mail to the mayor were not immediately returned . CNN 's Phil Gast and Amanda Watts contributed to this report .
NEW : Judge sets bail at $ 500 . Mayor of Arizona is indicted on fraud , money laundering charges . Search warrant executed at mayor 's home , office , car . Charges allege mayor took money to pay bond .