Paraguay prosecutors charge ousted president Peña and seek his pretrial detention

Prosecutors in Paraguay on Saturday charged former president Santiago Peña over the collapse of Ueno Bank and asked a court to hold him in custody before trial, Al Jazeera reported, a day after the Senate removed him from office.

According to Al Jazeera, which cited Reuters, Peña faces counts of breach of trust and acting for personal gain. He spent the morning being questioned at the attorney general’s office in Asunción. He had been under house arrest since Friday, when senators voted him out.

Co-defendant and allegations

Prosecutors also charged Carlos Carvallo, whom Peña named to run the central bank in 2023, and want him detained as well. Al Jazeera said Carvallo additionally faces a count of producing false public documents. Critics note that he had previously been an executive at the firm that later became Ueno.

The accusations against Peña, as described by Al Jazeera, are that he used his political weight to steer hundreds of millions of dollars of state money into the digital bank while sparing it regulatory scrutiny as worries grew about risky lending. He is also accused of allowing the state pension fund to place $355m at Ueno, beyond what the law permits. CBS News reported that the most serious charges carry up to 10 years in prison.

Peña held a stake in Ueno’s parent company until March 2025. He denies wrongdoing and argues that the bank’s difficulties were a matter for regulators. His lawyer, Ricardo Preda, told the BBC the allegations were a “reckless accusation” that was “irresponsible and opportunistic”.

How he lost office

The BBC reported that 44 of 45 senators backed his removal, with one absent, including members of his own party. Peña had offered to resign, but lawmakers declined, which stripped him of the immunity that normally protects former presidents. Al Jazeera said an arrest order followed shortly after the vote.

Regulators took control of Ueno on Tuesday over solvency concerns. Nearly three million people were left unable to reach their savings or use their cards, and thousands joined protests across the country, some of which turned into clashes with police.

Public anger persists

Paraguay’s central bank said on Saturday that 1.2 million customers had received partial or full repayment of insured deposits, according to Al Jazeera. CBS News reported that deposits are insured up to about $35,000, which the bank says covers 97% of Ueno’s customers. Many people are still waiting, and public frustration has not eased.

Some protesters are also unhappy with Peña’s successor, Pedro Alliana, who sworn in on Friday. Al Jazeera noted that he belongs to the same Colorado Party and is himself under investigation in connection with the collapse. Alliana has promised that those affected will be compensated, the BBC reported.

Still unclear is when a court will rule on the detention requests for Peña and Carvallo.