Paraguay Prosecutors Charge Peña, Seek Detention

Paraguayan prosecutors have charged former President Santiago Peña with breach of trust and abuse of office for personal gain, and have asked a court to detain him pending trial.

The charges came on Saturday, a day after Peña was removed from office following a political crisis linked to the collapse of digital lender Ueno.

Prosecutors also charged former central bank chief Carlos Carvallo with breach of trust, producing false public documents and abuse of office for personal gain. They have also requested his pretrial detention.

According to prosecutors, Peña used his position as president to influence government agencies and state-owned companies to keep large sums of public money in ueno, despite his financial ties to the lender. They said the relationship created a conflict of interest because Peña encouraged or influenced decisions that benefited the bank.

Peña held shares in ueno’s parent company until March 2025. However, he has denied any wrongdoing and described the bank’s problems as regulatory.

The former president appeared at the Attorney General’s Office on Saturday to respond to the allegations. Prosecutors said he should be held at a location the court determines if a judge approves the request. His lawyer and Carvallo’s lawyer did not immediately respond to requests for comment.

The charges against Peña could carry a prison sentence of up to 10 years each, according to the prosecutor. Peña’s removal from office on Friday brought Vice President Pedro Alliana to power. Alliana was sworn in on the same day and will complete the presidential term, which ends in August 2028.

Carvallo resigned as central bank chief earlier this week as the crisis surrounding Ueno worsened. He previously led the digital lender until 2023. The bank’s collapse has left millions of customers struggling to access their accounts and triggered protests in the capital, Asunción.

The scandal has also drawn in senior government officials and former Ueno executives. Meanwhile, regulators have moved to reassure financial markets and limit the impact on the wider banking system.

On Saturday, the central bank said it had paid out the equivalent of $160 million to nearly 1.2 million savers under the state deposit guarantee scheme.