A Paraguayan judge ordered this Saturday, November 7, that former President Santiago Peña remain under preventive detention, after the Prosecutor's Office formally accused him of alleged breach of trust and administration for his own benefit within the investigation into the closure of the Ueno Bank.

First modification: 11/07/2026 - 22:47 Last modification: 11/07/2026 - 22:48

The criminal judge of Guarantees Humberto Otazú ordered this Saturday, November 7, the preventive detention of the now former president Santiago Peña. The former president, dismissed and detained the day before, must comply with the measure in the offices of the Presidential Escort, as ordered by the court.

Hours earlier, the Prosecutor's Office had requested the preventive detention of Peña, after the former president appeared before the headquarters of the prosecuting body, in Asunción.

Prosecutors also requested preventive detention for the former head of the Central Bank, Carlos Carvallo.

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The Prosecutor's Office charged Peña with breach of trust, administration for personal benefit and production of public documents with false content.

The decision comes days after the collapse of Ueno Bank, which left millions of people without access to their savings.

Read alsoWho is Pedro Alliana, the new president of Paraguay? What measures will you take in the face of the crisis for Ueno Bank?

Santiago Peña appeared before the Prosecutor's Office after his dismissal

The former president appeared this Saturday before the State Attorney General's Office, hours after being detained as part of the investigation related to the collapse of Ueno Bank. The appearance occurred a day after the Senate removed him through a political trial for "poor performance of duties", in the midst of the financial crisis affecting the entity. Peña arrived at the tax headquarters in a black vehicle and under police escort to give a statement to the Public Ministry. The procedure, initially scheduled for the unit specialized in economic crimes and anti-corruption, was transferred for security reasons.

The former president spent the night in the Presidential Escort Regiment, after he was transferred from his home due to the presence of protesters in the surrounding area. His arrest occurred after an order executed by police officers and the Prosecutor's Office. Among the elements pointed out by the legislators who promoted his dismissal is Peña's shareholding in Ueno Holding, a business conglomerate that owns the bank, which the former ruler himself would have sold in March 2025. However, these allegations are part of the accusations that must be clarified in the corresponding procedures.

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The investigation also reaches Carlos Carvallo, who presided over the Central Bank of Paraguay (BCP) until last Tuesday, November 3, when he presented his resignation in the middle of the Ueno Bank resolution process. Carvallo had previously directed Financiera Ueno, the predecessor of the banking entity. After voluntarily appearing before the authorities on Friday, he was arrested. In this case, the Prosecutor's Office has charged 27 people, including Miguel Vásquez, one of the founders of Ueno Bank, who was transferred to prison along with five other directors.

The investigation seeks to determine possible responsibilities in the bank's management and financial supervision. The closure of the entity due to solvency problems affected some 2.94 million clients, including state agencies whose funds were frozen. However, refunds of funds for some savers have already begun.

Peña's departure activated the presidential succession and brought to power Pedro Alliana, until then vice president, who was sworn in on Friday before Congress to complete the mandate until August 2028. While the investigations progress, the authorities must clarify the circumstances of the banking collapse, the business links indicated and the destination of the committed resources. The arrest and appearance of the former president constitute actions within an ongoing criminal investigation, so possible individual responsibilities must be determined through the corresponding judicial procedures.

Read alsoAfter Peña's departure in Paraguay, how is the return of funds to Ueno Bank clients continuing?

What is Ueno Bank and how did it trigger the political crisis in Paraguay?

Launched in 2021, Ueno is a Paraguayan digital bank that experienced rapid growth to reach nearly three million clients in a country of 6.5 million inhabitants. The entity, compared to platforms such as Nubank, Revolut or Monzo, managed around $850 million in public funds, including resources from state institutions and organizations linked to the pension system. However, its expansion came under suspicion due to alleged excessive loans to companies related to its main shareholder, the Vázquez Group.

The crisis broke out when the Central Bank of Paraguay detected non-compliance with the minimum solvency requirements and ordered the entity to be subjected to a resolution process, which temporarily left millions of clients without access to their accounts. Among those affected are pensioners and public institutions. The authorities announced the transfer of deposits to other financial entities and approved measures to expedite compensation to savers.

The scandal acquired political dimensions due to former president Santiago Peña's former business ties with the Vázquez Group, a stake that he claimed to have sold in March 2025. Although ueno maintains that Peña was never a shareholder or direct investor in the bank, opposition legislators denounced possible conflicts of interest and questioned the management of public funds. The Prosecutor's Office included the former president among the people investigated and issued arrest warrants against eight executives of the entity.

The actions of regulatory bodies also came under scrutiny, especially since the then president of the Central Bank, Carlos Carvallo, had previously headed ueno. Carvallo resigned on Tuesday, while the institution defended that it had inhibited itself from participating in decisions related to the bank. Doubts about financial supervision, added to customer protests and political pressure, precipitated Peña's dismissal and opened a new stage of institutional uncertainty.

Despite the magnitude of the scandal, authorities maintain that the problem is limited to one and does not represent a structural weakness of the Paraguayan banking system. However, the entity also accumulated some 510 million dollars in international financing, including a bond issue of 350 million on Wall Street, so the crisis could affect investor confidence and the financial reputation of Paraguay, which had managed to position itself as one of the most stable economies in South America.

Read alsoReport from Asunción: Peña's fall sparks celebrations; Alliana is sworn in as president

With Reuters and local media

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