Paraguay’s Ex-President Peña Ordered Held in Pretrial Detention

A Paraguayan judge ordered former President Santiago Peña held in pretrial detention on Saturday, one day after the Senate removed him from office. Judge Humberto Otazú said detention was necessary to make sure Peña stayed in the country while the case went forward.

Prosecutors charged Peña with breach of trust and administration for personal gain. Each charge carries up to 10 years in prison, prosecutor Nancy Salomón said. Peña’s lawyer, Ricardo Preda, told reporters his client was pleading not guilty. “We will submit to the investigation and I am sure that when this investigation is over the result will be the dismissal,” Preda said.

The charges

Prosecutors say Peña used his position as president to steer government agencies and state-owned companies toward keeping large amounts of public money deposited at Ueno, even though he had financial ties to the lender. Peña held shares in Ueno’s holding company until March 2025. He denies wrongdoing and has said the bank’s problems were a regulatory matter.

The judge also ordered former central bank chief Carlos Carvallo held in pretrial detention, in a holding center. Prosecutors charged Carvallo with breach of trust, producing false public documents and administration for personal gain. Carvallo resigned as central bank chief earlier this week. He had run Ueno’s predecessor until 2023.

A day in court

Peña arrived at the Attorney General’s Office in Asunción on Saturday morning to appear before prosecutors. He had spent Friday night in custody after the Senate voted to remove him. Vice President Pedro Alliana was sworn in Friday to serve out Peña’s term, which runs through August 2028.

Local media reported Peña would be held at the headquarters of the Presidential Escort Regiment, the military unit that guards the president.

The bank at the center of it

Ueno is a digital lender with about 3 million customers in a country of 6.5 million people. The central bank moved to wind it 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.

The central bank said Saturday it had paid the equivalent of $160 million to nearly 1.2 million savers under the state deposit guarantee. The attorney general’s office opened three criminal investigations into the collapse. Eight Ueno executives turned themselves in earlier this week.

Peña has led Paraguay since August 2023. His removal capped a week in which his own Colorado Party turned on him. The crisis has drawn protests in Asunción and left regulators working to contain the damage to the wider financial system.