Former Paraguayan President Santiago Peña was detained by police on Tuesday, following a warrant issued by the Prosecutor’s Office for alleged fraud connected to the collapse of Ueno Bank, a digital banking firm that had frozen the accounts of about three million customers.
The arrest came after the former leader was recently impeached by Congress, a move carried out on the basis of accusations that Peña used his position to benefit the bank, prompting accusations of a conflict of interest. Prosecutors filed charges of abuse of trust and alleged embezzlement of public funds through Ueno, according to a report from TASS.
Ueno Bank’s troubles began in late October, when the Central Bank of Paraguay placed the institution under external administration, effectively shutting it down and freezing its assets. The move came after allegations of risky lending practices and a sudden spike in account closures that left customers in doubt over the safety of their deposits. The Central Bank’s action froze accounts of roughly three million users, a figure that highlights the breadth of the fraud’s impact across the country’s 7‑million population, as noted in TASS releases.
Pena’s impeachment process began earlier this week. He was accused by Congressional members of leveraging his presidential influence to channel hundreds of millions of dollars of public money into Ueno Bank, while regulators allegedly overlooked “vulnerable” risk parameters. The impeachment hearing revealed testimony that Peña had a public stance that aligned with the bank’s growth strategy, although the former president has denied any wrongdoing, asserting he resigned before Congress could ratify the vote.
Executive staff in the Prosecutor’s Office claimed that the warrant for Peña’s arrest was a direct consequence of evidence indicating the embezzlement scheme. They highlighted that the ex‑president’s sudden resignation “did not absolve him from responsibility” for the alleged misappropriation of public funds, the agency stated. Meanwhile, supporters of Peña criticized the impeachment as a political maneuver, arguing that the impeachment trial lacked sufficient precedent and that no quorum was present to uphold the legitimacy of the vote.
Opposition lawmakers, meanwhile, argue that the crackdown on Peña is “the first step toward accountability” in the corruption culture that has plagued Paraguayan politics for years. “We cannot allow irregularities in the banking system when public funds are at stake,” said a spokesman for the opposition coalition as reported by TASS. He added that the investigation into the alleged embezzlement was “necessary to preserve public trust.”
The allegations linking Peña to Ueno Bank are a continuation of a broader investigation into the digital bank’s collapse. Analysts suggest that Peña’s involvement as a public official could have influenced the bank’s rapid expansion, potentially affecting risk assessment procedures. The Central Bank’s review of Ueno’s financial records, however, remains ongoing, and FBI specialists are reportedly engaged to audit the bank’s cash flows for evidence of public funds diversion.
In light of the detention, Congress has announced plans to close a full inquiry into Peña’s alleged misuse of power. The investigative committee will interview key banking officials and review financial transactions that may confirm the Prosecutor’s Office’s claims. The committee is expected to release a report within the next weeks, shedding more light on the allegations and possible consequences for Peña if found guilty.
Shortly after the arrest, local media outlets including ABC Color and Última Hora reported the event, calling attention to the three‑million‑customer freeze and the ex‑president’s conflict‑of‑interest claims. In a joint statement, those outlets underscored that many users are still living without access to their money, while the national economy feels the ripple effect of the collapse, a concern echoed by economists at the University of Asunción.
As the political and legal process unfolds, the immediate question remains: will Peña’s detention translate into a formal trial for embezzlement, or will the case unspool into a prolonged political struggle? The answers may hinge on the outcome of the Central Bank’s investigation and the extent of evidence showing direct influence over the bank’s operations by an ex‑presidential figure. The next step will involve court hearings that could bring to light the full extent of the alleged fraud and Peña's role in the Ueno Bank collapse, shaping Paraguay’s future approach to banking regulation and political accountability.
