Former Guatemala president Alfonso Portillo has been indicted by a federal grand jury for money laundering reportedly involving a bank in Bermuda.

Portillo — the subject of a manhunt — is said to have embezzled tens of millions of public dollars by transferring cash from Miami to the Island and Europe.

The charges were unsealed in New York on Monday, after authorities in Guatemala searched in vain for the former president at several of his properties following an extradition request from the United States.

The grand jury suspects Portillo diverted $1.5 million of donations by the Taiwanese government from a "Libraries for Peace" programme to accounts controlled by friends and family, among other accusations.

The indictment also alleges he embezzled at least $3.9 million from the Guatemalan Defense Ministry that was laundered through the national mortgage bank Credito Hipotecario Nacional (CHN) by abusing his oversight powers with the bank, and through a Guatemalan company called Confia.

"Portillo embezzled money from the Guatemalan government and made a number of fraudulent transactions through CHN and other Guatemalan banks to enrich himself and his co-conspirators," the indictment said, adding that funds were also funnelled through bank accounts in the United States and Europe.

The co-conspirators were not identified.

Portillo also faces corruption charges in Guatemala, where he was elected president in 2000 making promises of redistributing wealth. He fled to Mexico shortly after his four-year term ended and was extradited from there to Guatemala in 2008.

The Bank of Bermuda did not respond to a request for comment, with Butterfield and Capital G saying it is against their policy to divulge information about clients or potential clients.