
Judge orders detention due to flight risk in connection with Ueno banking scandal
AI-generated summary
After years of growth, the digital bank Ueno fell into a serious crisis when the equity ratio fell below half of the required minimum value. The Paraguayan central bank initiated a resolution process. Peña maintained business relationships with Grupo Vázquez, to which Ueno belongs, until spring 2025 and held shares in the group holding company.
First Santiago Peña loses his presidency, now he has to be imprisoned. The judiciary accuses him of serious legal violations in connection with a banking scandal.
Paraguay's deposed President Santiago Peña has been taken into custody in connection with the bank scandal. “It must be ensured that he remains in the country,” said Judge Humberto Otazú after a hearing and ordered him to be accommodated in a military barracks in the capital Asunción.
At a press conference, the judge justified his decision with the risk of absconding and the possible hindrance of the investigation. He also took into account what information Peña may have had during his time in office in connection with the banking scandal and organized crime.
Peña did not comment on the allegations at the hearing. His lawyer Ricardo Preda rejected the assumption that there was a risk of escape or concealment - after all, his client was no longer president and therefore could no longer access information from the state apparatus. Preda described pre-trial detention as the most drastic of all possible security measures.
Banking scandal with political consequences
The public prosecutor's office had charged Peña on suspicion of breach of trust and self-aggrandizement. She also requested pre-trial detention and the freezing of his assets. Former central bank chief Carlos Carvallo is also being investigated in connection with the scandal. In addition to infidelity and self-favoring, he is also accused of forging documents.
The case is part of a scandal surrounding the digital bank Ueno, which fell into a serious crisis after years of growth. Paraguay's central bank initiated resolution proceedings after the financial institution's capital ratio fell below half of the minimum required value. At times, customers were no longer able to access their accounts.
Peña maintained business relationships with Grupo Vázquez, to which Ueno Bank belongs, until spring 2025. During his presidency, he held shares in the group holding company and also invested money in Ueno and a bond from another group company. At the same time, state institutions deposited money in the bank.
According to the public prosecutor's office, Peña is said to have influenced the investment of public funds at Ueno, even though he himself had business ties to the company. He rejected allegations of possible conflicts of interest.
On Friday, Peña was removed as president through parliamentary impeachment proceedings. His previous deputy Pedro Alliana was sworn in as his successor and is expected to rule the country until August 2028.
AI outlook — possibilities, not facts
The investigations against Santiago Peña and Carlos Carvallo continue and could lead to legal proceedings.
Likely · Within months
Pedro Alliana will rule Paraguay until August 2028.
Very likely · Within months

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