Paraguay's impeached ex-president charged with crimes linked to collapse of major bank
Santiago Peña charged with breach of trust, administration for personal gain
asserted
Peña → impeach → gain
A Paraguayan judge on Saturday ordered former President Santiago Peña held in pretrial detention at a military facility while prosecutors investigate his ties to digital lender Ueno, whose collapse has left millions of customers struggling to access their accounts.
asserted
collapse → order → accounts
Judge Humberto Otazú ordered Peña, who has been charged with breach of trust and administration for personal gain, held at the facility, saying detention was necessary to ensure he remained in the country while the case proceeded.
asserted
case → order → country
The detention, a day after Peña's removal from office, deepens a political and financial crisis that has prompted protests in Asunción, swept up senior officials and led regulators to try to contain risks to the wider financial system.
asserted
that → deepen → system
Peña's attorney, Ricardo Preda, told journalists that Peña was pleading not guilty to the charges.
asserted
Peña → tell → charges
"We will submit to the investigation and I am sure that when this investigation is over the result will be the dismissal," Preda said.
asserted
Preda → submit → investigation
Otazú also ordered former central bank chief Carlos Carvallo to pretrial detention in a holding centre after prosecutors charged him with breach of trust, producing false public documents and administration for personal gain.
asserted
prosecutors → order → gain
Carvallo did not respond to a request for comment.
asserted
Carvallo → respond → comment
Conflict of interest accusations
Peña has been accused of using his political influence to steer hundreds of millions of dollars in public funds into Ueno while regulators overlooked risky insider lending.
asserted
regulators → accuse → lending
Prosecutors say that relationship created a conflict of interest as Peña encouraged, facilitated or influenced decisions benefiting the bank.
asserted
Peña → say → bank
Rumblings of the crisis started in June, when inspectors at the central bank found a pattern of risky lending to insiders, reported ABC Color, a leading Paraguayan newspaper.
asserted
Color → start → insiders
Ueno Bank executives arrive in custody at the anti-corruption prosecutor's office in Asunción on Wednesday.
asserted
executives → arrive → Wednesday
Ueno had extended large sums to companies tied to its owners, beyond what the law allows and without enough collateral to cover the debts if they went bad.
asserted
they → extend → debts
By November, regulators investigating Ueno's loans to companies linked to its owners found poorly documented lending, the central bank said, as well as expenses the bank had wrongly counted as assets.
asserted
bank → investigate → assets
Once the books were corrected, Ueno's capital — the cushion banks must keep to absorb losses — fell to less than half the legal minimum.
asserted
banks → correct → minimum
A person stands outside a closed branch of Ueno Bank in Asunción on Thursday.
asserted
person → stand → Thursday
The central bank announced the lender's seizure Tuesday — freezing the accounts of nearly three million customers — and began a process of transferring deposits and recoverable assets to other banks before liquidating what remained.
Ueno's app, cards and transfers went dark and its branches locked their doors, leaving desperate depositors lined up outside.
asserted
branches → announce → depositors
On Wednesday, a rush to open new accounts elsewhere crashed other banks' mobile apps, fuelling public panic.
asserted
rush → open → panic
People line up outside a branch of the Banco Familiar bank in Asunción on Wednesday.
asserted
People → line → Wednesday
The central bank on Saturday said the equivalent of $160 million US had been paid out to nearly 1.2 million savers, under the state deposit guarantee scheme.
asserted
equivalent → say → scheme
Peña, who was a shareholder in Ueno’s holding company until March 2025, has denied wrongdoing and said the bank's problems were a regulatory matter.
The two charges against Peña could carry a sentence of up to 10 years in prison each, prosecutors say.
uncertain
prosecutors → hold → prison
Carvallo resigned as central bank chief earlier this week as the crisis surrounding Ueno escalated.
asserted
crisis → resign → Ueno
He had previously headed the digital lender until 2023.
asserted
He → head → 2023
Prosecutors have charged 27 bank officials and associates with breach of trust and attempted fraud.
asserted
Prosecutors → charge → trust
'The public is fed up'
asserted
public → feed → ?
Peña submitted his resignation Thursday, but Congress did not accept it and pressed ahead with an impeachment trial.
asserted
Congress → submit → trial
Opposition lawmakers insisted on his removal to prevent him from leaving office with immunity.
asserted
lawmakers → insist → immunity
"He must go, but not home.
asserted
He → go → ?
He must go to a maximum-security prison," opposition Sen. Yolanda Paredes told reporters.
asserted
Paredes → go → reporters
"The public is fed up with impunity.
asserted
public → feed → impunity
His ouster brought Vice-President Pedro Alliana to power, with the longtime ruling Colorado Party politician sworn in on Friday to complete Peña’s term through August 2028.
asserted
politician → bring → August
Pedro Alliana addresses lawmakers after taking the oath of office as Paraguay's new president on Friday after Peña's impeachment.
asserted
Alliana → address → impeachment
The collapse has left millions of customers struggling to access their accounts and prompted protests in Asunción.
asserted
collapse → leave → Asunción
Thousands of protesters demanding access to their frozen savings and accountability for Ueno's failure have clashed with police firing rubber bullets and pepper spray this week.
asserted
Thousands → demand → bullets
Paraguay's largest teachers' union, which has more than 40,000 members, plans to begin an indefinite national strike Monday to press for protection of public pension funds.
asserted
which → have → funds
Protesters gather outside Peña's residence in Asunción on Friday.
asserted
Protesters → gather → Friday
On Saturday, a few dozen protesters gathered outside the attorney general's compound hoping to express their frustration with Peña, who was driven quickly out of the building.
asserted
who → gather → building
Some of the protesters said they also want Paraguay's new president, who was a close ally of Peña, to be investigated.
asserted
who → say → Peña
"They are all accomplices," said Liliana Jara, a demonstrator who showed up at the site.
asserted
who → say → site
The Aporia
