Judge Miguel Angel Galvez yesterday ordered the former president held during the investigation into whether he should stand trial.
Galvez determined that there was enough evidence to link him to the fraud ring, known as "La Linea," or "The Line," in which businesspeople paid bribes to avoid import duties through Guatemala's customs agency.
The scheme, uncovered last year by prosecutors and a U.N. commission known as CICIG, which is investigating criminal networks in the country, is believed to have defrauded the state of millions.
It was another blow against entrenched corruption in the small Central American country and another first for Perez Molina, who was the first democratically elected president to resign when he stepped down last week.
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The corruption scandal brought together thousands of protesters, from the indigenous to business people and clergy, all demanding the president resign and fundamental changes in the political process.
The discontent played out during Sunday's presidential election, in which the front-running establishment candidate placed third in the vote and will not likely advance to the October 25 runoff.
In an interview exclusive to The Associated Press, Perez Molina said he is being held in a small room with a bathroom and a small window with bars. The cell is in the Matamoros military barracks in the capital city, but is run by the civilian prison system.
The cell has a metal door that only guards can open from the outside, but it usually remains open and he can walk into a small corridor, he said. He has two guards.