The deposed President of Paraguay Santiago Peña was placed in preventive detention on Saturday, in a military installation of the presidential guard, after his indictment for "breach of trust" in connection with the debacle of the Ueno Bank which harmed millions of savers.

Published on: 08/11/2026 - 07:01

The descent into hell continues for Santiago Peña. Shattered by the enormous Ueno Bank scandal, the deposed president of Paraguay was placed in preventive detention on Saturday, November 7.

Santiago Peña "is subject to pre-trial detention. This is his status as long as (...) the court considers that it is the appropriate measure", judge Hernan Otazu told the press in Asuncion.

The ex-president, added the judge, will be detained for the moment in a military installation of the presidential guard, where he was transferred Friday evening for security reasons, after having initially been placed under house arrest following his dismissal.

Previously on Saturday, he had been charged with "breach of trust" and "management for personal gain", as well as the former president of the Central Bank Carlos Carvallo.

Nearly half of the population affected

“We want to see the person responsible for this misfortune in prison. Prison for Peña!” Macarena Chilavert, a 33-year-old lawyer, told AFP near the prosecutor's office where Santiago Peña was being heard.

According to extracts from the indictment to which AFP had access, Santiago Peña, who until 2025 held shares in a holding company that owned the bank, is accused of having presided over "a significant increase and concentration of public funds and pension funds" in Ueno Bank, for the equivalent of more than 800 million dollars.

Conservative president of Paraguay since 2023, close ally of Washington, Santiago Peña, 47, whose mandate in principle ended in 2028, was unanimously convicted by the Senate of "poor exercise of his functions" and dismissed.

The banking crisis, which quickly turned into a political crisis, broke out on Tuesday with the Central Bank (BCP) placing Ueno Bank, an online bank that has flourished in recent years, under insolvency supervision.

The BCP's intervention froze the deposits of nearly three million people, the number of customers Ueno claimed was almost half the country's population. Companies, institutions and pension funds have also been affected.

Involved in the wake of the dismissal of Santiago Peña, his vice-president until then, Pedro Alliana, 52, affirmed before the Senate that "the compatriots who are going through a very difficult situation because of the financial chaos will be fully compensated. We will not leave him alone"

On Saturday, the Central Bank announced that nearly 1.2 million defrauded small savers had recovered their money thanks to payments from the BCP Guarantee Fund into accounts opened in other banks.

Money gradually returned to savers

These disbursements total to date around one billion guaranis ($160,000), Pedro Alliana said on X.

These compensations are continuing in stages, starting with the small accounts held at Ueno. The branches of several Paraguayan banks remained exceptionally open this weekend, BCP announced.

Friday evening, several hundred people gathered outside Parliament welcomed the dismissal of Mr. Peña with cries of joy and songs.

“Finally, Santiago Peña is gone, finally justice has been done!”, rejoiced Jessica Aquino, a 32-year-old employee, to AFP. “Now we want him to give us our money back and end up in prison!”

During the impeachment trial, senators accused the ex-president of having "permitted, tolerated and failed to correct a diversion of pension funds to a bank linked to the presidential circle". In other words, to “have subordinated the public interest to private interests”, according to Senator Adrián Vaesken.

As of Thursday, 48 hours after the scandal broke, Santiago Peña himself presented his resignation. But Parliament refused it, making an impeachment trial inevitable. If he had accepted it, Santiago Peña would have become a senator for life, as the Constitution provides for ex-presidents, and would have enjoyed parliamentary immunity.

The banking crisis in Paraguay had multiple shock waves: in Argentina, a thousand employees of the technology company ITTI, from the same group as Ueno, were suspended for 30 days without pay.

With AFP

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