Peñitas Mayor Rodrigo "Rigo" Lopez pleaded not guilty to federal theft charges on Tuesday.

U.S. District Judge Nadia Medrano set Lopez’s bond at $50,000. Court records indicate Lopez’s release is pending processing.

The mayor is accused of embezzling or fraudulently obtaining property of the La Joya Independent School District, according to a two-count indictment unsealed Monday.

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Lopez is also accused of paying district employees $5,000 in exchange for a $70,000 contract with a business he owned.

"From March through August of 2018, LJISD allegedly made purchases totaling approximately $70,010 from Lopez’s company Xizaka LLC," according to a news release from the U.S. Attorney General’s Office.

Federal authorities arrested Lopez Monday as he re-entered a port of entry in Hidalgo County.

Prosecutors say if convicted, Lopez faces up to 10 years on each count.

Attempts to reach Lopez's attorney and a city representative for comment were unreturned as of Tuesday evening.

Lopez has another hearing set for July 26.

CORRECTION: An earlier version of this story misidentified U.S. District Judge Nadia Medrano