Former Paraguayan president detained pending trial; central bank has paid US$160 million

A Paraguayan judge today ordered former President Penaña to be detained at a military facility. Prosecutors are investigating his ties to Ueno Bank, a digital bank whose collapse left millions of customers unable to access funds.

According to reports from Reuters and Agence France-Presse, Judge Humberto Otazu ordered the detention of Santiago Pena today on charges of breach of trust and using his position for personal gain. Otasu said the detention was necessary to ensure that Penha remained in the country while the case was pending.

Pena was detained the day after he was removed from office, further deepening Paraguay's political and financial crisis. The crisis has triggered demonstrations in the capital, Asuncion, involving high-ranking officials, as financial regulators try to contain risks and avoid spreading to the wider financial system.

Pena's lawyer, Ricardo Preda, told the media that Pena has pleaded not guilty to the charges. "We will cooperate with the investigation and I am sure that when the investigation is completed, the result will be that the charges will be dropped," he said.

Impeachment, removal from office, loss of immunity, prosecutors request asset freeze

Pena is the youngest president in Paraguay's history. Ueno Bank, the main bank with which he had business relations, collapsed three days ago. He originally offered to resign, but members of Congress chose to remove him from office through impeachment, depriving him of the immunity that a former president would enjoy if he resigned on his own initiative.

Pena was immediately taken to the prosecutor's office today and charged with "breach of trust and mismanagement for personal gain."

Pania was questioned for about three hours about her relationship with Ueno Bank. This financial technology company, which focuses on digital services, has accounts with nearly half of Paraguay’s population, which has a population of about 6.5 million.

The 47-year-old economist originally held a stake in Ueno Holding, the bank's holding company, until he sold it last year.

Prosecutors requested that the assets of Pena and former central bank president Carlos Carvallo be frozen. Cavallo was also charged with the same crime.

Judge Otasu also ordered Cavallo to be detained in a detention center today. Cavallo did not respond to a request for comment.

New president promises to protect depositors, central bank has paid US$160 million

Pena was replaced by former Vice President Pedro Alliana. Ariana promised not to abandon the nearly 3 million depositors affected by the collapse of Ueno Bank, including retirees.

The central bank said today that it has paid the equivalent of US$160 million to nearly 1.2 million depositors through the national deposit protection mechanism.