Santiago Peña was impeached following the collapse of Ueno Bank, which left millions of customers unable to access their accounts.
Paraguay’s former president, Santiago Peña, has been formally charged after appearing for questioning at the attorney general’s office in Asunción. The charges follow his impeachment by lawmakers over alleged involvement in a banking scandal that has left nearly half the country unable to access their savings.
Peña, who was placed under house arrest on Friday, faces accusations of breach of trust and administration for personal gain, according to reporting by Reuters.
The crisis centers on Ueno, a digital bank that expanded rapidly during Peña’s presidency, partly through an injection of more than $800 million in public funds. The institution attracted millions of customers before its collapse.
The bank’s failure has prompted days of protests across Paraguay, with thousands taking to the streets to demand access to their savings. Some demonstrations have turned violent, with demonstrators clashing with police.
Peña, who held a stake in Ueno’s parent company until March 2025, has denied wrongdoing, arguing that the bank’s problems were a regulatory matter.
What is Peña accused of?
Among the allegations are that Peña used his political influence to direct hundreds of millions of dollars in public funds into Ueno while shielding the bank from regulatory scrutiny as concerns mounted over its risky lending practices.
Prosecutors also point to his appointment of Carlos Carvallo, a former executive at the company that later became Ueno, as head of Paraguay’s central bank in 2023. Carvallo was charged on Saturday with breach of trust, producing false public documents, and administration for personal gain.
Peña is further accused of allowing Paraguay’s state pension fund to deposit $355 million at Ueno, exceeding legal limits.
Peña offered his resignation on Thursday, but lawmakers rejected it and pressed ahead with impeachment proceedings to prevent him from obtaining the political immunity he would have gained had he stepped down.
An arrest order was issued shortly after he was removed from office.
On Saturday, after announcing the charges, prosecutors also sought pretrial detention for both Peña and Carvallo.
Bank collapse sparks political crisis
The scandal erupted after regulators took control of Ueno on Tuesday over solvency concerns, leaving nearly three million people unable to access their savings or use their bank cards.
Paraguay’s central bank said Saturday that 1.2 million customers had already received partial or full reimbursement of their insured deposits.
That has done little to quell public anger, with many depositors still waiting for their money. Some protesters have also expressed frustration over Peña’s replacement, Pedro Alliana, who belongs to the same conservative Colorado Party and is himself under investigation in connection with the bank’s collapse.
Alliana, who was sworn in as president on Friday, has pledged to help those affected by the crisis.