Paraguayan Prosecutors Charge Impeached President Pena Over Bank Collapse

Paraguayan prosecutors have charged impeached President Santiago Pena with breach of trust and mismanagement for personal gain, following the collapse of Ueno Bank, a popular online bank that held accounts for nearly half of Paraguay's 6.5 million people and over $800 million in government funds. Pena, 47, was removed from office by the Senate on Friday, just three days after the bank's collapse, which sparked major protests.

Pena, who came to power in 2023 and was Paraguay's youngest-ever president, owned shares in Ueno Holding, the bank's holding company, until he sold them last year. He is accused of using his influence as president to steer millions in government deposits to Ueno Bank and of hiding or downplaying its financial woes, despite being warned about questionable loans and solvency issues.

The charges against Pena also include a conflict of interest for naming former Ueno Bank director Carlos Carvallo to run Paraguay's Central Bank. Pena's lawyer, Ricardo Preda, denied the charges against his client, arguing that in Paraguay, it is not the president but rather a minister who decides where government money is deposited.

After a hearing with Pena on Saturday, Judge Hernan Otazu ordered the former president taken into pre-trial custody and held at the same Asuncion facility where he was taken after his removal from office on Friday. The judge also froze the assets of Pena and Carvallo, who faces the same charges as the former president, plus one of falsifying government documents.

The Central Bank has started paying out money to Ueno Bank customers caught up in the collapse, with more than 50 percent recovering their funds. However, many people, including Giovanni Catolinom, 40, are still waiting to recover their trapped funds, with Catolinom telling AFP that he lost 16 years of work, around $16,000, in the bank.

Pena was replaced by Vice President Pedro Alliana, who promised not to abandon the depositors, including pensioners, affected by Ueno's demise. Alliana, from the same right-wing Colorado Party as Pena, will serve out the remainder of Pena's term, which ends in 2028. The collapse of Ueno rocked usually stable Paraguay, with thousands of people taking to the streets to demand their money back.

The ouster of Pena is a further blow for US President Donald Trump's network of allies in South America, with Trump's favorite for Brazilian president, Flavio Bolsonaro, defeated by left-wing incumbent Lula Inacio Lula da Silva last month. Pena's removal comes after a fast-moving sequence of events, with protesters demonstrating outside his home and rejoicing over his ouster.

Key points

• Pena charged with breach of trust and mismanagement for personal gain over Ueno Bank collapse.
• Former president taken into pre-trial custody and held at Asuncion facility.
• Central Bank starts paying out money to Ueno Bank customers, with over 50 percent recovering their funds.