of unlawful association, the attorney-general's office said.
She as arrested on Monday morning at her home near Guatemala City.
Ms Torres - a former first lady whose husband, Álvaro Colom, was president from 2008 to 2012 - described her arrest as a political witch hunt.
Who is Sandra Torres?
Ms Torres ran for the presidency three times and failed each time to be elected.
Despite never making it to the top post, she was considered to have been the "power behind the throne" during Mr Colom's presidency.
She divorced him in 2011 to bypass a law that banned close relatives of the president from succeeding him. Mr Colom is currently under investigation for alleged fraud.
Ms Torres won the first round of the presidential election in June, but was beaten by her conservative rival, Alejandro Giammattei, by a 15-point margin in the second round on 11 August.
She and her party came under investigation earlier this year for alleged campaign irregularities but once she had registered as presidential candidate, she enjoyed immunity from prosecution.
Following her election defeat, that no longer applied.
Corruption was one of the main issues voters said they wanted to see tackled by the new president.