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Paraguay’s prosecutors have charged former President Santiago Peña and former Central Bank chief Carlos Carvallo Spalding in connection with the collapse of Ueno Bank, AnewZ reported. Prosecutors have asked a court to order both men held in pretrial detention.
Peña is accused of breach of trust and self-interested administration. Carvallo faces the same charges, as well as an accusation of preparing false official documents. The charges were filed on Saturday, November 7, after both men were questioned by prosecutors. They declined to testify during questioning.
Prosecutors have also asked for the pair’s assets to be frozen and for six months to prepare their final charges. A judge handling criminal cases will decide whether to order pretrial detention. Before the charges were filed, Peña’s lawyer, Ricardo Preda, opposed the request, saying there were no grounds for detention. Peña has previously denied wrongdoing and described the matter as a regulatory issue.
Ueno Bank customers lose access to their money
Ueno Bank, one of Paraguay’s major digital banks, was placed under regulatory supervision this week, leaving millions of customers unable to access their funds. Carvallo resigned as head of the Central Bank of Paraguay (BCP) on November 3, at the president’s request, after regulators intervened.
The Senate voted to remove Peña from office on November 6. Vice President Pedro Alliana was sworn in as the South American country’s new president. Prosecutors issued an order for Peña’s arrest shortly afterward.
Peña’s appointment of Carvallo prompts conflict-of-interest claims
Soon after taking office in August 2023, Peña appointed Carvallo to head the BCP. Carvallo had previously led a financial company that later became Ueno Bank. Critics said the appointment represented a conflict of interest.
Prosecutors said Peña retained shares in Ueno’s holding company until March 2025. The shares were also cited in the impeachment charges; Peña sold them last year following public pressure.
The BCP has denied that a conflict of interest existed, saying Carvallo recused himself from discussions of all decisions related to Ueno. 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 ordered the pretrial detention of six former Ueno directors. Prosecutors have charged 27 people in total. Authorities have seized luxury cars, a yacht and two small aircraft linked to Miguel Vazquez, the owner of Ueno’s controlling stake.
In Paraguay, breach of trust is punishable by up to five years in prison, rising to up to 10 years in aggravated cases.
