A Paraguayan court ordered former President Santiago Peña held in pretrial detention after prosecutors in Asunción formally charged him with breach of trust and administration for personal gain over the collapse of digital lender Ueno Bank. Peña, who denies wrongdoing, was placed under house arrest late Friday and later moved to a military base following his impeachment.
The Senate voted 44-0 on Friday to remove Peña rather than accept his resignation, blocking him from taking the lifetime Senate seat and prosecutorial immunity granted to former presidents. Prosecutors are investigating his ties to Ueno’s parent company, Grupo Vázquez, where he held a stake until March 2025, as well as the placement of $850 million in public funds at the lender, including a 4,600% jump in state pension deposits from 80 billion guaraníes to 1.6 trillion guaraníes ($380 million) since he took office in 2023.
Paraguay’s central bank seized Ueno on Tuesday after $146 million in related party loans to Grupo Vázquez companies pushed its solvency ratio down to about 6%, half the 12% legal minimum, freezing $2.8 billion in deposits across 3 million accounts and driving local Tether stablecoin quotes above 6,000 guaraníes, a 13% premium over the official dollar rate. The central bank said Saturday it has returned funds to 1.2 million customers, while newly sworn in President Pedro Alliana pledged full compensation for depositors.