Peña: Paraguay’s ex-president taken into custody over bank crisis
A Paraguayan judge ordered former President Santiago Peña held in pretrial detention at a military facility after prosecutors charged him over the collapse of Ueno bank, which froze savings for nearly three million people and led to his impeachment.
A judge in Paraguay has ordered former President Santiago Peña held in pretrial detention, after prosecutors charged him over his alleged role in the collapse of digital lender Ueno. Paraguay's ex-president was taken into custody as the banking crisis left nearly half the country unable to reach its savings.
Judge Humberto Otazu ordered Peña held at the Presidential Escort Regiment headquarters, a military facility, rather than a conventional prison. He said detention was needed to make sure Peña stayed in the country while prosecutors investigate his ties to Ueno.
The ruling came hours after the charges were filed. Prosecutor Nancy Salomon told a press conference that the public prosecutor's office had charged Peña with "breach of trust and administration for personal gain."
Central Bank chief Carlos Carvallo faces the same charges, plus one of falsifying government documents. Otazu also ordered him held in pretrial detention.
Peña, who held a stake in Ueno's parent company until March 2025, denies wrongdoing. He has argued that the bank's problems were a regulatory matter.
What prosecutors allege
Prosecutors say Peña used his political influence to steer hundreds of millions of dollars in public funds into Ueno. They also allege he shielded the bank from regulatory scrutiny as concerns grew over its risky lending.
They point to his 2023 appointment of Carvallo, a former executive at the company that later became Ueno, to lead the central bank. Peña is further accused of letting the state pension fund deposit $355m at Ueno, above the legal limit.
Ueno grew rapidly during his presidency, partly through an injection of more than $800m in public funds.
Impeachment and unrest
Regulators took control of Ueno over concerns about its solvency, leaving nearly three million people unable to access savings or use their bank cards. That is about 60% of the country's adult population.
Peña offered his resignation, but lawmakers rejected it and began impeachment proceedings. The move was meant to deny him the political immunity he would have kept had he stepped down. An arrest order followed shortly after his removal.
Days of protests have swept Paraguay, and some demonstrations have turned violent, with protesters clashing with police. Analyst Fabián Chamorro said impeachment "was the way congress found to prevent a popular explosion."
The Central Bank said 1.2 million customers have received partial or full reimbursement of their insured deposits. Public anger has not eased.
Pedro Alliana, Peña's successor, belongs to the same conservative Colorado Party and is himself under investigation over the bank's collapse. He was sworn in as president and has pledged to help those affected.
The damage has spread beyond depositors. Businesses report sales down by as much as 80% this week, and about 32,000 pensioners whose public pension funds were invested in the bank are without payments.
Pedro Volpe, a 50-year-old writer and lawyer, could not see his balance when he opened his banking app. "Now I'm having to work miracles to pay my bills," he said. "I don't know what I'll do next week."
