Paraguay ex-president faces new charges over digital bank collapse
Prosecutors accuse Santiago Pena of criminal association in the Ueno failure, a week after Congress impeached him.
By Sakura Ellis ·
Paraguayan prosecutors have formally charged former president Santiago Pena with criminal association related to the collapse of digital bank Ueno. The new allegation was announced on Friday, marking the first criminal accusation following his removal from office by Congress one week prior.
Pena, 47, already faces charges for breach of trust and self-dealing. He is currently held in pretrial detention at a military facility. Prosecutors allege he used his presidential authority to direct millions in government funds to Ueno while holding financial ties to the institution. They claim he concealed or minimized the bank's financial instability despite warnings about risky lending practices.
Pena entered office in 2023 and maintained a stake in Ueno's holding company until last year. He denies all charges against him. Investigators raided his official residence in Asuncion on Thursday. Agents from the economic crimes unit extracted data and collected information for the ongoing case.
The political process leading to his arrest was swift. Last week, Pena attempted to resign, but Congress rejected the move. Instead, lawmakers impeached him, and he was arrested shortly after losing his position. The Ueno collapse triggered massive protests across the country. Thousands of customers were locked out of their accounts and demanded accountability and the return of their money.
Prosecutors have located missing assets abroad, though they did not specify which countries hold the funds. They previously requested assistance from the United States, Luxembourg, and Argentina to trace the money. Prosecutor Francisco Cabrera told reporters that the necessary steps are under way to request that the assets be frozen.
Three former central bank officials were also arrested on Friday. They are accused of knowing about Ueno's issues since late last year. Ueno had grown rapidly under Pena's leadership, expanding from a financial technology startup into a major firm managing state pensions and government accounts. The bank held more than $800m in public funds at the time of its failure.
The Central Bank returned savings to more than 1.8 million depositors on Thursday. Credit ratings agency Fitch has placed Paraguay's sovereign rating on watch for a possible downgrade. A downgrade would increase the cost of government borrowing.
