Paraguay's former president, Santiago Peña, was charged on Saturday in Asunción over his alleged role in the collapse of the digital lender Ueno, one day after lawmakers removed him from office. Prosecutors also charged Carlos Carvallo, whom Peña appointed to lead the central bank in 2023, according to Al Jazeera. Both men face allegations of breach of trust and administration for personal gain, with Carvallo additionally accused of producing false public documents.
The charges followed a morning of questioning at the attorney general's office. Peña had been placed under house arrest on Friday, and on Saturday prosecutors said they would seek pretrial detention for both men.
Why it matters
Ueno's failure has left close to three million Paraguayans unable to reach their savings or use their bank cards, and it has already cost the country a president. The bank expanded quickly while Peña was in office, drawing in customers partly on the strength of more than $800m in public money, Al Jazeera reports. Its troubles have sent thousands into the streets in recent days, with some demonstrations turning violent as protesters clashed with police.
The case also tests Paraguay's institutions at a fragile moment. Peña tried to resign on Thursday, but legislators turned the offer down and carried the impeachment process through instead. According to Al Jazeera, lawmakers acted to strip him of the political immunity he would have kept had he simply stepped down.
What prosecutors allege
The accusations centre on Peña's ties to Ueno and to the company that preceded it. He held a stake in the bank's parent company until March 2025. Investigators claim he leaned on his position to steer hundreds of millions of dollars of public funds into Ueno while shielding it from supervisors as worries mounted over its lending standards.
Two specific decisions feature in the allegations. One is the 2023 appointment of Carvallo, a former executive at the firm that later became Ueno, to run the central bank. The other is the placement of $355m from Paraguay's state pension fund with Ueno, an amount said to exceed legal limits.
Peña denies any wrongdoing. He has argued that the bank's difficulties were a matter for regulators rather than a criminal matter.
A bank taken over and a public still waiting
Regulators seized control of Ueno on Tuesday, citing doubts about whether the institution could meet its obligations. The central bank said on Saturday that 1.2 million customers had now been repaid their insured deposits, either in part or in full. That figure is well short of the customer base, and Al Jazeera reports that the repayments have done little to calm public anger among those still owed money.
The political fallout has not stopped at Peña. His successor, Pedro Alliana, was sworn in on Friday and has promised to help account holders. Alliana comes from the same conservative Colorado Party and is himself under investigation in connection with the bank's failure, a fact that has drawn frustration from some protesters. Coverage of the unrest by AP News and of the wider mood in the country by The Guardian has described a public reckoning that goes beyond one man's fate.
Attention now turns to the courts, where prosecutors are pressing for Peña and Carvallo to be held in custody while the case proceeds.
