Paraguay prosecutors charge ex-president Santiago Peña over Ueno bank collapse

Paraguayan prosecutors have charged former President Santiago Peña with breach of trust and mismanagement for personal gain, in connection with a banking crisis that left millions of people without access to their funds. Peña, who served as the nation's youngest-ever president, was removed from office by the Senate three days after the collapse of Ueno Bank, a digital-first fintech company with which he had business ties.

The indictment alleges that between 2023 and 2026, Ueno Bank received deposits and loans from public and pension entities, while also granting loans to companies within its economic group in an irregular manner. Peña, who held shares in Ueno Holding until last year, was questioned for around three hours regarding his connections to the bank.

Prosecutors requested that he be held in preventive custody and that his assets, as well as those of former Central Bank president Carlos Carvallo, be frozen. Carvallo, who was also charged with the same offenses, is scheduled to be questioned by prosecutors later on Saturday.

Following his arrest, Peña spent Friday night in custody and faced protests from demonstrators demanding his detention. He was succeeded by former Vice President Pedro Alliana, who vowed to support the nearly three million affected depositors, including pensioners. While many celebrated Peña's removal, some protesters were angered by Alliana's selection, as he is from the same right-wing Colorado Party and is believed to have been aware of the Ueno crisis.

The collapse of Ueno Bank, which managed accounts for several state entities and state pensions, caused widespread unrest in Paraguay. In response to the bank's failure, the Central Bank began making advance payments to affected depositors. Paraguay's removal from US President Donald Trump's network of allies in South America is another setback for Trump's South American agenda.

US Assistant Secretary of State for Western Hemisphere Affairs Juan Pablo Segura emphasized Paraguay's status as a strategic partner, friend, and ally of the United States, expressing Washington's anticipation of working with Alliana in the coming years.