Paraguay's Peña impeached, jailed after Ueno Bank collapse strands millions

Prosecutors charged Santiago Peña with breach of trust and administration for personal gain on Saturday, a day after the Senate impeached and removed him. He has pleaded not guilty and is being held in pretrial detention at a military facility while the investigation proceeds. Peña resigned Thursday, and Vice President Pedro Alliana was sworn in to finish the term through August 2028.

The trigger was Ueno Bank, whose services stopped working in the early hours of Tuesday morning. The bank claimed 2.9 million customers — about 60% of Paraguay's adult population — and the Central Bank counted roughly 1.8 million depositors. By Saturday, authorities said almost 1.2 million people had received advance payments from the state deposit guarantee fund, with many still waiting.

Carlos Carvallo, whom Peña installed to run the Central Bank in 2023 after he led Ueno, was arrested and charged with breach of trust, administration for personal gain and producing false public documents. A judge sent him to pretrial detention at a police facility. Eight Ueno executives were also arrested and charged, including 36-year-old CEO Miguel Vásquez.

Public money was deep in the wreckage. The Social Security Institute, known as IPS, had around $355 million parked at Ueno, roughly 9% of its portfolio. Economist and former finance minister Manuel Ferreira told ABC Color that many of the bank's loans went to companies tied to its controlling owners, Grupo Vásquez, including $146 million to just three firms, and described promissory notes signed by the same people on both sides of some transactions.

Peña's own filings put him close to the bank: his 2023 asset declaration listed Ueno Holding shares worth about $845,000, representing roughly 1.6% of paid-up capital before he sold them in March 2025. Prosecutors allege he leaned on public agencies and state-owned entities to keep deposits at the bank despite his ties to its parent group. Ueno launched as a fintech in 2021, won its banking license in November 2023, and grew fast on app-based accounts, cashback deals and heavy marketing.

Horacio Cartes, the tobacco magnate and former president who handpicked Peña for the 2023 race, publicly cut him loose on Wednesday, calling for an investigation and declaring there should be 'no impunity for anyone.' His faction backed impeachment the next day. Outside Congress on Friday, hundreds protested; 28-year-old barista Elizabeth González said 'people don't have any trust,' while 71-year-old artisan Elodia Saveredo said she came 'because it affects all of Paraguay.'