Paraguay's former president Pena hit with new charge over collapse of Ueno bank
Santiago Pena, removed from office last week and now in pretrial detention, faces a criminal association charge over his alleged role in the failure of the digital bank Ueno.
By Olga Menon ·
Prosecutors in Paraguay have brought a new charge of criminal association against former president Santiago Pena in connection with the collapse of the digital bank Ueno, one week after Congress forced him from office.
The prosecutor's office announced the charge on Friday. It comes on top of existing counts of breach of trust and self-dealing against Pena, who is being held in pretrial detention at a military facility.
The 47-year-old is accused of abusing his office to steer millions of dollars in government funds toward Ueno, and of hiding or minimising the bank's financial difficulties even after warnings about its risky lending, all while he had financial ties to the institution. Pena denies all of the charges.
Pena, who took office in 2023, kept a stake in the bank's holding company until last year. On Thursday, investigators searched his official residence in the capital, Asuncion, with the prosecutor's office saying economic crimes agents were extracting data and collecting information relevant to the case.
Last week, Pena attempted to resign the presidency, but Congress refused to accept his resignation and instead removed him through impeachment. He was arrested shortly afterward.
Ueno's failure left customers shut out of their accounts and triggered huge protests across the country, with thousands of people demanding both accountability and the return of their money.
Prosecutors searching for missing funds said on Friday that assets had been traced abroad, without naming the countries involved. They had earlier sought assistance from the United States, Luxembourg and Argentina in tracking down the money. "The necessary steps are under way to request that they be frozen," prosecutor Francisco Cabrera told reporters.
Three former central bank officials were also arrested on Friday, accused of having known about Ueno's problems since late last year.
The bank, which held more than $800m in public funds, expanded rapidly during Pena's presidency, transforming from a financial technology company into a large firm managing state pensions and the accounts of several government entities. The credit ratings agency Fitch has since placed Paraguay's sovereign rating on watch for a possible downgrade, a step that would raise the government's borrowing costs.
On Thursday, the Central Bank said it had returned savings to more than 1.8 million people who had deposited money with the bank.
