Ousted Paraguay President Ordered to Stay at Home as Probe Continues

Police stood outside Santiago Peña’s home in Asunción as crowds gathered nearby, after prosecutors ordered the ousted Paraguayan president to stay there. The order came after all 44 senators present voted to remove him, amid anger over a bank collapse that cut millions off from their savings. Peña denies wrongdoing and is due to appear before prosecutors Saturday. ^2,14

The 44 votes followed regulators’ seizure of Ueno Bank earlier in the week. Lawmakers accused Peña of using his influence to direct hundreds of millions of dollars in public funds to the lender. Regulators overlooked risky loans to people linked to its owners. Prosecutors are investigating allegations including breach of trust and influence peddling. They also ordered the arrest of Carlos Carvallo, who led the finance company that became Ueno before Peña appointed him central bank chief in 2023. ^2,4

Ueno’s collapse left about three million customers unable to access accounts, savings or pension payments, bringing the crisis into daily life for retirees, workers and other depositors. The bank had grown quickly and counted nearly two-thirds of Paraguay’s adults among its customers, according to one report. The scandal has raised questions about whether public money and government oversight helped the bank grow, and whether regulators failed to act. Peña has denied the accusations; his removal also strips him of the immunity he would have had as a former president. ^7,13

Those depositors now face a new president and an unresolved fight over their money. Vice President Pedro Alliana was sworn in to finish Peña’s term, which runs until August 2028. Alliana is also under investigation in connection with the bank, and he has promised customers will be compensated. Prosecutors are expected to question Peña Saturday, while his government faces pressure to return deposits and find out who was responsible for Ueno’s failure. ^7,14