Paraguay Arrests Ex-President Peña Hours After His Removal From Office

Paraguay put former President Santiago Peña under house arrest on Friday evening, hours after the Senate removed him from office over the collapse of Ueno Bank.

The prosecutor’s office sent an arrest warrant for Peña shortly after the Senate vote, Reuters reported. Police then arrested him, according to ABC Color, a leading Paraguayan newspaper. He was placed under house arrest at his home in Asunción, where police kept a security cordon and dozens of protesters gathered outside.

Peña will remain under house arrest while the prosecutor’s office determines the final charges against him. Anti-corruption and cybercrime prosecutors filed the detention requests. Prosecutors have also charged Peña and senior financial officials with breach of trust, known in Paraguay as lesión de confianza, and seized assets in the case, including a yacht tied to Ueno director Miguel Vázquez.

Carvallo ordered into custody

Former central bank chief Carlos Carvallo was ordered held in police custody. Carvallo once ran Financiera Ueno, the company the bank grew out of, before Peña appointed him to run the central bank. He resigned on Tuesday at Peña’s request.

The arrests came the same day the Senate voted 44-0 to remove Peña, with one senator absent and none voting against. The Senate found him guilty of poor performance of duties. Removal stripped him of the lifetime Senate seat and the immunity that comes with it, which is what left him open to arrest.

Vice President Pedro Alliana was sworn in as president soon after the vote. He will serve out the rest of Peña’s term, which runs to August 2028. Congress must now choose a new vice president.

The bank at the center of it

Ueno Bank had about 3 million customers in a country of 6.5 million people. That is roughly 60 percent of Paraguay’s adults.

The central bank moved to wind the bank down this week after finding its solvency ratio had fallen below half of the legal minimum. Accounts were frozen. Ueno held about $800 million in public deposits, including about $380 million from the state pension and health fund, according to the Associated Press.

Peña held shares in Grupo Vázquez, the business group that controls Ueno, until March 2025. Lawmakers accuse him of conflicts of interest, misuse of pension funds and shielding the bank from scrutiny. He denies wrongdoing and has said the affair is a regulatory matter for the courts.

Prosecutors have charged 27 bank officials and associates with breach of trust and attempted fraud. A judge ordered six Ueno executives jailed pending trial, including founder Miguel Vázquez and bank president Juan Manuel Gustale. Two others were placed under house arrest. The central bank began paying deposit guarantees on Friday, starting with customers holding up to 10 million guaraníes, about $1,565.

Peña tried to resign on Thursday. Congress would not accept it. The Chamber of Deputies voted 78-0 to impeach him instead, and the Senate opened a trial that night. Peña did not appear to defend himself on Friday after the Senate rejected his request for 72 more hours to prepare, 39 votes to 3.