Ex-Paraguay Leader Appears Before Prosecutors After Removal Over Banking Collapse

Paraguay’s former president Santiago Peña was taken to the attorney general’s office for questioning on Saturday, shortly after Congress ousted him over the collapse of Ueno Bank. The Central Bank said it is working to compensate hundreds of thousands of depositors locked out of their accounts.

Drone footage broadcast by Telefuturo showed Peña arriving at the attorney general’s compound in a black SUV, escorted by police. He wore navy blue pants and a white shirt and was not handcuffed.

Prosecutors on Friday ordered the arrest of Peña and former Central Bank chief Carlos Carvallo as part of a criminal investigation into alleged breach of trust and other offences linked to Ueno Bank’s failure. The order followed a Senate vote that unanimously removed Peña from office. He was transferred to a military base late Friday as protesters gathered outside his home.

Regulators seized Ueno Bank, freezing roughly three million customers’ savings and triggering a political crisis. Peña was succeeded by Vice President Pedro Alliana, who began naming a new cabinet on Saturday. The Central Bank reported that 1.2 million Ueno customers had received partial or full reimbursement of insured deposits under Paraguayan law.

Lawmakers accused Peña of leveraging his political influence to funnel hundreds of millions of dollars in public funds into Ueno while regulators ignored risky insider lending. Peña has denied any wrongdoing.

The removal marks the biggest political upheaval in Paraguay in over a decade, a nation of 6 million that returned to democratic rule in 1989 and has largely been governed by the conservative Colorado Party. The ousted leader was an ally of former U.S. President Donald Trump.

Peña submitted a resignation on Thursday, but Congress rejected it and proceeded with an impeachment trial. Opposition legislators pushed for removal to prevent him from leaving office with immunity.

“He must go, but not home. He must go to a maximum‑security prison,” opposition Senator Yolanda Paredes told reporters, reflecting public demand for accountability.

In a farewell statement released shortly before his ouster, Peña said he hoped his departure would spare Paraguay further harm and that he placed the country above his personal fate.

Public protests have grown, with thousands demanding access to frozen savings and accountability. Demonstrations have escalated, leading to clashes with police using rubber bullets and pepper spray. The national teachers’ union, representing over 40,000 members, announced an indefinite strike starting Monday to safeguard public pension funds.

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