Image source: Pixabay
Former President Impeached and Detained
Former Paraguayan President Santiago Peña has been placed under house arrest shortly after being impeached by Congress. The detention follows a severe banking crisis triggered by the suspension of Ueno Bank, which left approximately 2.9 million customers—about 60 percent of Paraguay's adult population—unable to access their accounts or make basic purchases.
The public prosecutor's office opened an investigation into Peña on charges of illicit enrichment, money laundering, and influence peddling. Prosecutor Elena Fiore Franco confirmed that Peña was detained at his residence, where he voluntarily allowed officers to enter and made himself available for legal proceedings.
Banking Crisis Triggers Nationwide Disruption
The account freezes caused widespread disruption across the country, with retail sales falling by up to 80 percent. Demonstrations broke out nationwide, leading to clashes with police officers.
Following Peña's impeachment, Vice President Pedro Alliana was sworn in as Paraguay's new leader.
Allegations of Misconduct and Bank Expansion
Investigators are focused on Peña's ties to Ueno Bank, which grew significantly under his administration. Key elements of the investigation include:
- Peña held around $1 million in shares purchased in 2019 in Ueno Holding, which he disposed of in April 2025 after taking office.
- Peña appointed former Ueno CEO Carlos Carvallo Spalding to lead Paraguay's central bank.
- Spalding authorized Ueno to become a digital bank, leading to its rapid expansion into one of the country's largest banks by deposits.
- An estimated $800 million to $860 million in state and public pension funds were deposited into Ueno.
Congressional Proceedings and Defense
Impeachment proceedings initiated on Wednesday and concluded on Friday. Peña attempted to resign on Thursday in a bid to obtain lifetime senatorial immunity granted to former presidents, but lawmakers rejected his resignation, leaving him subject to ordinary court proceedings.
Peña did not appear before Congress in person, delegating his defense to lawyers while posting messages on social media. Opposition senator Rafael Filizzola characterized the events during the session as one of the largest corruption scandals in Paraguay's democratic history.