Prosecutors in Paraguay have charged former President Santiago Peña and ex-central bank chief Carlos Carvallo Spalding over the collapse of Ueno Bank, and have asked a court to hold both men in pretrial detention.
Peña has been charged with breach of trust and administration for personal gain. Carvallo faces the same charges, plus producing false public documents. The charges were filed on Saturday (7 November) after both men were questioned by prosecutors. Both declined to say anything during the hearing.
Prosecutors have also asked for the freezing of both men’s assets and have asked for six months to formulate their final case. The decision on pretrial detention now rests with a criminal court judge. Before the charges were filed, Peña’s lawyer, Ricardo Preda, rejected any pretrial detention, saying there was nothing to justify it. Peña has previously denied wrongdoing and described the affair as a regulatory issue.
Ueno Bank, a major Paraguayan digital bank, was seized by regulators this week, leaving millions of customers unable to access their money. Carvallo resigned as head of the Central Bank of Paraguay (BCP) on Tuesday (3 November) at the President’s request after regulators intervened.
Paraguay’s Senate voted to remove Peña on Friday (6 November). Vice President Pedro Alliana was sworn in as the South American country’s new President. Prosecutors ordered Peña’s arrest shortly afterwards
Peña appointed Carvallo, who previously headed the finance company that became Ueno Bank, to lead the BCP shortly after taking office in August 2023. Critics called the appointment a conflict of interest.
Prosecutors said Peña held shares in Ueno’s holding company until March 2025.The impeachment charges cite the stake, which Peña divested under pressure last year.
The BCP has denied any conflict of interest, saying Carvallo recused himself from all Ueno-related decisions. Those who filed complaints against Carvallo allege that BCP officials knew of Ueno’s financial difficulties from April 2026 but failed to act in time.
In a separate case, a judge has ordered six former Ueno directors to be held in pretrial detention. Prosecutors have charged 27 people in total. Authorities have seized luxury cars, a yacht and two small planes linked to Ueno’s controlling shareholder, Miguel Vázquez.
Breach of trust carries a sentence of up to five years in prison, or up to 10 in serious cases, in Paraguay.
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