(AFP) - Malaysia's ex-leader Najib Razak is facing 21 money-laundering charges related to a transfer of $681 million into his bank account, police said Thursday, following his arrest over the multi-billion-dollar 1MDB scandal.

Najib is expected to be charged in court Thursday afternoon after being detained a day earlier by anti-corruption investigators.

He has already been hit with seven charges over state fund 1MDB since unexpectedly losing power in May, but observers said the latest accusations against him are the most serious yet.

Allegations that the politician and his cronies looted huge sums from the investment vehicle were a major factor in the shock defeat of his long-ruling coalition at the hands of a reformist alliance headed by Mahathir Mohamad.

Police questioned Najib Thursday morning. Afterwards, deputy national police chief Noor Rashid Ibrahim said in a statement that "as many as 21 charges involving $681 million have been prepared".

The charges under anti-money laundering laws relate to receiving, using and the transfer of illegal funds, he said in a statement.

Najib has already been charged with money-laundering, criminal breach of trust and abusing his position over claims he pocketed some $10 million from a former unit of 1MDB. He denies any wrongdoing.

However, the latest arrest related to a central allegation in the long-running scandal -- that huge sums from the fund flowed into his bank accounts before a hotly contested election in 2013.

When reports about the bank transfers surfaced in 2015, they represented a turning point in the 1MDB scandal and dramatically raised pressure on Najib and his inner circle.

The attorney-general later cleared Najib of any wrongdoing, saying the money was a personal donation from the Saudi royal family, and closed down domestic investigations.

However, since returning for a second stint as premier, 93-year-old Mahathir has reopened investigations and vowed to bring Najib to justice.

1Malaysia Development Berhad was set up in 2009 and overseen by Najib. But the leader and his cronies were accused of looting vast sums from it and using the money to buy everything from real estate to pricey artworks.

The US Department of Justice, which is seeking to recover items allegedly bought with stolen 1MDB cash in the United States, estimates that $4.5 billion in total was looted from the fund.

© Agence France-Presse