Juan Manuel Alvarez now faces extradition as he is wanted by US authorities over the money laundry allegations.

Mexican authorities also said Alvarez, who detained in Oaxaca state, has ties to an international money-laundering network that spans throughout Mexico, Colombia, Panama and the United States.

Alvarez was described by officials as the "principal financial operator" for an undisclosed drug trafficking group.

The state is the stronghold of the Jalisco New Generation Cartel (JNG), which downed an army helicopter killing six military personal, last May.

The JNG have historic ties to Guzman's Sinaloa Cartel.

Drug lord Guzman, who escaped twice from Mexican maximum-security prisons, was recaptured in Mexico in January after a dramatic shootout.

He has now begged to be extradited to the US after claiming he was being tortured by prison guards.

El Chapo said that he could “no longer take this situation” after he previously said he was being “turned into a zombie” by a rigorous prison routine.

The plea to be handed over came as the drug kingpin hoped he would be treated better in a US prison.

As head of the Sinaloa cartel, Guzman is accused of leading a bloody war against rival gangs and smuggling vast quantities of illegal drugs into the US.