Paraguay: Impeached president faces jail bid over Ueno
Prosecutors filed charges against former President Santiago Peña and ex-central bank chief Carlos Carvallo following the digital bank's collapse.
By Matthew Collins ·
Paraguayan prosecutors filed formal charges against former President Santiago Peña on Saturday, seeking his pretrial detention. The legal move followed directly on the heels of Peña's impeachment from office on Friday. The collapse of the digital bank Ueno triggered the removal of the head of state. Peña and former central bank chief Carlos Carvallo now face potential prison time.
The prosecution team requested that a court order both men into custody while awaiting trial. Authorities stated that if the judge approves, Peña would serve his detention at a location chosen by the court. Carvallo faces accusations of breach of trust, producing false public documents, and administration for personal gain. Peña is charged with breach of trust and administration for personal gain.
The core allegation against Peña is that he used his presidential authority to influence government agencies and state-owned entities. Prosecutors claim these actions kept large amounts of public funds deposited at Ueno. The former president maintained financial ties to the lender during this period. This relationship allegedly created a conflict of interest that benefited the bank.
Peña has denied wrongdoing, describing the bank's troubles as a regulatory issue rather than executive interference. He was a shareholder in Ueno's holding company until March 2025. Neither his attorney nor Carvallo responded to requests for comment on Saturday. Each count against Peña carries a maximum sentence of 10 years if convicted.
Peña appeared at the Attorney General's Office on Saturday after his removal from power. Vice President Pedro Alliana, a member of the ruling Colorado Party, was sworn in on Friday to complete the term through August 2028. Carvallo resigned as central bank chief earlier this week as the crisis deepened. He previously led Ueno until 2023, a tenure prosecutors believe contributed to the scandal.
The collapse of Ueno has caused hardship for millions of customers who struggled to access their accounts. Protests have erupted in the capital, Asunción. The scandal has ensnared several senior officials and former executives. Regulators have worked to reassure markets and contain risks to the wider financial system.
The central bank updated the status of the state deposit guarantee scheme on Saturday. Officials confirmed that the equivalent of 160 million US dollars had been paid out to nearly 1.2 million savers. This payout aims to stabilize the situation for depositors while the government addresses the legal and financial fallout.
