A Paraguayan judge on Saturday ordered former president Santiago Peña to be held in pretrial detention at a military facility while prosecutors investigate his connections to ueno, a digital lender whose collapse has left millions of customers unable to reach their money.
Judge Humberto Otazú ruled that detention was necessary to guarantee that Peña, who faces charges of breach of trust and administration for personal gain, stays in the country as the case moves forward. Prosecutor Nancy Salomón said each of the two charges could carry a prison sentence of up to 10 years.
The jailing came one day after Peña was dramatically removed from power on Friday. His ouster elevated Vice President Pedro Alliana, a longtime figure in the ruling Colorado Party, who was sworn in on Friday to serve out the remainder of the term through August 2028. Peña had appeared at the Attorney General's Office earlier on Saturday to face prosecutors.
The case has deepened a combined political and financial crisis in Paraguay, fueling protests in the capital, Asuncion, ensnaring senior officials and pushing regulators to shield the broader financial system from fallout.
Peña's lawyer, Ricardo Preda, told journalists that his client is pleading not guilty. "We will submit to the investigation and I am sure that when this investigation is over the result will be the dismissal," Preda said.
Prosecutors accuse Peña of using the presidency to sway decisions by government agencies and state-owned entities so that large sums of public money remained deposited at ueno, even though he held financial ties to the lender. They argue that this created a conflict of interest, since Peña encouraged, facilitated or influenced decisions that benefited the bank. Peña was a shareholder in ueno's holding company until March 2025. He has denied any wrongdoing and described the lender's troubles as a regulatory matter.
Otazú also sent former central bank chief Carlos Carvallo to pretrial detention in a holding center. Carvallo faces charges of breach of trust, producing false public documents and administration for personal gain, and did not respond to a request for comment. He resigned as central bank chief earlier this week as the ueno crisis intensified. He had previously led the digital lender until 2023.
The central bank said on Saturday that the equivalent of $160 million has been paid out to nearly 1.2 million savers under the state deposit guarantee scheme.
During his time in office, Peña cultivated close relations with Israel. In 2024, he reopened Paraguay's embassy in Jerusalem, making his country the sixth at the time to do so. Most of Israel's allies keep their embassies in Tel Aviv, with many governments maintaining that the status of Jerusalem should be settled as part of a future two-state solution.
