Paraguay's former president, Santiago Peña, was charged on Saturday in connection with a banking scandal that has left close to half the country unable to reach their savings, according to Al Jazeera. The charges came after he spent the morning being questioned at the attorney general's office in Asunción, one day after lawmakers removed him from office. Reuters, cited by Al Jazeera, reported that Peña faces allegations of breach of trust and administration for personal gain.
Prosecutors announced the charges on Saturday and said they are also pursuing pretrial detention for Peña and for Carlos Carvallo, the central bank chief he appointed in 2023. Carvallo was charged the same day with breach of trust, producing false public documents and administration for personal gain. Peña had been placed under house arrest on Friday, and The Lufkin Daily News reported that he is being held at a military unit in Asunción.
Why it matters
The case has pulled apart the top of Paraguay's government in a matter of days. A sitting president was impeached, sworn out of office and charged within roughly a week of regulators stepping into a failing bank. The bank at the centre of it, Ueno, drew millions of customers and more than $800m in public money during Peña's tenure, Al Jazeera reports. Its collapse has sent thousands into the streets and left nearly three million people unable to use their savings or bank cards.
The unrest has not stayed peaceful. Al Jazeera reports that some demonstrations have turned violent, with protesters confronting police. AP News published photographs of the unrest as Peña offered to step down. The Guardian described the mood in the country as "very strange, very sad," reporting that the bank's failure has left millions broke.
What prosecutors allege
The allegations against Peña centre on his relationship with Ueno, a digital bank that expanded quickly while he was in office. Al Jazeera reports that investigators say he used his political position to steer hundreds of millions of dollars in public funds toward the bank and to keep regulators at arm's length as worries mounted over its lending practices.
Two specific claims stand out in the reporting. The first concerns Carvallo, who worked as an executive at the company that later became Ueno before Peña named him to lead the central bank in 2023. The second involves the state pension fund, which prosecutors say was allowed to place $355m with Ueno, an amount above what the law permits.
Peña has rejected the accusations. According to Al Jazeera, he maintains that the bank's troubles were a regulatory question rather than a matter for criminal prosecution. He held a stake in Ueno's parent company until March 2025, the outlet reports.
The sequence of events around his departure is also unusual. Peña offered his resignation on Thursday, but lawmakers turned it down and carried the impeachment process through instead. Al Jazeera reports that the move was intended to strip him of the political immunity he would have kept had he simply resigned. He was impeached on Friday and placed under house arrest the same day. BBC reported that Peña was impeached and placed under house arrest.
A bank failure and an unfinished payout
The crisis began on Tuesday, when regulators took control of Ueno over doubts about whether it could meet its obligations. Al Jazeera reports that the intervention left nearly three million customers without access to their money or their bank cards.
The central bank said on Saturday that 1.2 million customers have now received either partial or complete repayment of deposits covered by insurance. That figure represents less than half of those affected, and Al Jazeera reports that the payments have done little to calm public anger, with many still waiting for their funds.
Public frustration has also landed on Peña's successor. Pedro Alliana, a member of the same conservative Colorado Party, was sworn in as president on Friday. Al Jazeera reports that Alliana is himself under investigation in connection with the bank's failure, and that some protesters have voiced displeasure at his elevation. Alliana has promised to assist those hurt by the collapse.
What to watch
The immediate question is whether prosecutors secure pretrial detention for Peña and Carvallo, and how quickly the remaining Ueno depositors are repaid. Both will shape whether the street protests subside or grow.
