Mexico City — The head of Mexico's powerful teachers' union, Elba Esther Gordillo, was arrested along with 3 other people at Toluca airport near Mexico City on Tuesday for alleged embezzlement. The arrest has thrown down the gauntlet to powerful interests standing between President Enrique Pena Nieto and his plans to shake up Latin America's second-biggest economy.

Attorney General Jesus Murillo Karam said that Gordillo, who has led the 1.5 million-member National Union of Education Workers for 23 years, was detained on charges that she embezzled around $160 million from union funds to pay for property in the US, plastic surgery, homes, and other extravagances.

Elba Esther, a colorful woman long seen as a kingmaker and power-behind-the-scenes in Mexican politics, was snared a day after Pena Nieto signed a law aimed at improving education standards that she had opposed because it would weaken her union's clout. She was flown to the Attorney General's hangar in the Mexico City airport, where she asked to be checked by a doctor, according to Mexican television.

Murillo said that Gordillo, 68, was found to be in good health and was taken to Santa Martha Acatitla women's prison on the edge of Mexico City on Tuesday night. She spent the night there before appearing in court where she was formally read the charges of "operations with resources of illicit origin" and "organized crime"

The judge assigned to the case said he would rule in three to six days on whether the evidence is sufficient to merit a trial. If found guilty, Gordillo could face 30 years in prison.

The investigation started in December after Santander Bank alerted authorities to bank transfers in billions of pesos, according to the attorney general. "We are looking at a case in which the funds of education workers have been illegally misused, for the benefit of several people, among them Elba Esther Gordillo," Murillo said at a news conference.

It marks the downfall of a woman who rose from school teacher to become one of Mexico's most powerful political operators, displaying her opulence openly with designer clothes and bags, bodyguards, expensive cars and properties, including a penthouse apartment in Mexico City's exclusive Polanco neighborhood.

Prosecutors said they had detected nearly $3 million in purchases at Neiman Marcus using union funds, as well as $17,000 in US plastic surgery bills, and the purchase of a million-dollar home in San Diego. Meanwhile, Mexico's teachers are poorly paid and public education has long been considered sub-par.

"Between 2008 and 2012, there were illicit transfers from teachers' union accounts to personal accounts," the attorney general said. "Some funds eventually ended up in bank accounts in Switzerland and Liechtenstein. In one case $1 million was transferred to a Swiss account for a company owned by Gordillo's mother.

The education law signed by Pena Nieto on Monday still faces a fight from the teachers union because it requires a secondary law to be implemented. Gordillo had organized a string of protests by teachers against the reform, which moves much of the control of the education system to the federal government and away from the union - a union in which positions could be sold or inherited.

The reform creates a system of uniform standards for teacher hiring and promotion based on merit instead of union connections. It also allows for the first census of Mexico's education system, which Gordillo's union has largely controlled for decades, allegedly padding the payroll with thousands of phantom teachers. So great is the union's control that no one even knows exactly how many schools, teachers, or students exist in Mexico.

In October Gordillo was elected to another six-year term as leader of the teachers union.

The arrest comes as Pena Nieto prepares to launch a series of ambitious measures that aim to overhaul taxes, open up state oil giant Pemex to more private capital, and ease tycoon Carlos Slim's tight grip on Mexico's telecommunications industry.

The former State of Mexico governor vowed to usher in greater accountability and transparency, and his allies are portraying the investigation into Gordillo as part of the new PRI's broader efforts to clean up Mexico.

"The fundamental point is that resistance to reform by the various "entrenched powers" will be confronted with determination," Federico Berrueto, director general of Mexican polling firm GCE, said after Gordillo's arrest.

"I imagine Pena Nieto was looking to land a decisive blow against someone, and she was the politically convenient target," former foreign minister Jorge Castañeda told MVS radio. "They are sending a clear message. We're not playing games when it comes to governing."

Gordillo has long been a symbol of the government's cozy relationship with trade unions and established interests, which critics blame for fomenting inefficiency and helping to keep the economy lagging behind its emerging market peers.

Opposition lawmakers were quick to state that "to realize lasting change, Pena Nieto must go further than just arresting the head of the teacher's union."

"Today we're going to demand that Pena Nieto carries on with the others in the way he started with Elba Esther," said Armando Rios Piter, a senator for the leftist Party of the Democratic Revolution, or PRD. "There are hundreds and perhaps thousands who represent this same model of exploitation."