Paraguay’s former President Santiago Peña has been formally charged over the collapse of Ueno Bank, a day after the Senate removed him from office in an impeachment vote.
Peña spent Saturday morning at the attorney general’s office in Asunción for questioning before prosecutors announced the charges. Reuters reported he was charged with breach of trust and administration for personal gain, and prosecutors are seeking pretrial detention for him.
Former central bank chief Carlos Carvallo was charged on Saturday as well, with breach of trust, producing false public documents and administration for personal gain. Prosecutors are also seeking pretrial detention for Carvallo.
The charges are the latest turn in a banking scandal that has become Paraguay’s worst political crisis in more than a decade. Regulators took control of Ueno, a digital bank, on Tuesday over concerns about its solvency, leaving nearly three million people unable to access their savings or use their bank cards. Protests have followed across the country, with thousands taking to the streets demanding their money back; some demonstrations have turned violent.
Prosecutors allege Peña used his influence as president to direct hundreds of millions of dollars in public funds into Ueno while shielding the bank from regulatory scrutiny, and point to his appointment of Carvallo — a former executive at the company that later became Ueno — as head of the central bank in 2023. They also accuse him of allowing the state pension fund to deposit $355 million at Ueno, above legal limits. The bank had grown rapidly during his presidency, partly through an injection of more than $800 million in public funds.
Peña, who held a stake in Ueno’s parent company until March 2025, has denied wrongdoing, arguing the bank’s problems were a regulatory matter. He offered his resignation on Thursday, but lawmakers rejected it and pressed ahead with impeachment to prevent him gaining the political immunity a resigned president would hold. All 44 senators present voted to remove him, and he was placed under house arrest on Friday.
Paraguay’s central bank said on Saturday that 1.2 million customers had already received partial or full reimbursement of their insured deposits, but many are still waiting for their money back.
Vice President Pedro Alliana was sworn in as president on Friday to serve out the term, which ends in August 2028. Alliana has pledged to help those affected, though he is himself under investigation in connection with the bank’s collapse.
Source: Al Jazeera (https://www.aljazeera.com/economy/2026/11/7/paraguays-ousted-president-charged-over-banking-scandal), reporting Reuters.
