CORONADO - A woman accused of stealing nearly $160 million from teachers and spending it on plastic surgery, shopping sprees and expensive homes in San Diego has been arrested.

Elba Esther Gordillo had her arraignment in a Mexican jail on Wednesday.

Gordillo, who is the powerful head of the teachers' union in Mexico, was taken into custody in Toluca on Tuesday. She was at an airport outside of Mexico City after landing in her private jet from San Diego.

Mexican officials say the 68-year-old embezzled roughly 2 billion pesos or nearly $160 million over four years from the National Union of Education workers. Those funds were drained from union accounts and eventually used to set up accounts in Switzerland and Liechtenstein, officials say.

Gordillo had been at the helm of the 1.5 million member union for nearly 25 years.

10News found that she owned homes in the Coronado Cays. In addition to a lavish waterfront home, a source told 10News that Gordillo also owns a second home under construction in the Cays, which she purchased in 2010 for $4 million in cash.

But her spending does not end there. Federal prosecutors in Mexico say Gordillo spent at least $2.1 million on designer clothes and accessories at the Neiman Marcus store in the Fashion Valley Mall. She is also accused of spending upwards of $17,000 on plastic surgery in the United States.

"I'm very surprised," said a woman named Kelly who lives near Gordillo's Coronado home. "I think it's crazy."

Kelly also questioned the lavish spending that Gordillo is accused of.

"I think it is just a shame," she said. "It shows what type of person she is, I guess."

Gordillo's arrest comes one day after Mexico's President Enrique Pena Nieto signed a new education reform bill into law which now puts education in the hands of the federal government instead of unions.