Paraguay President Peña charged with crimes after ouster

Ken Parks, Bloomberg News on Nov 7, 2026

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Paraguay’s former President Santiago Peña was charged Saturday over his alleged role in the collapse of a major bank that set off widespread protests, a day after he was removed from office by the Senate.

The Public Prosecutor’s Office filed charges against Peña for breach of trust and self-enrichment in the administration of assets, according to a statement on the office’s website. He was placed in pretrial detention. Former central bank chairman Carlos Carvallo was charged with breach of trust, falsifying documents and enrichment.

All 44 senators present voted in favor of Peña’s ouster on Friday after the lower house of Congress unanimously backed his impeachment.

A key ally of U.S. President Donald Trump, Peña had offered to resign amid pressure over his ties to Ueno Bank SA, a commercial bank that shut down this week. Peña owned a stake in the bank’s parent company, Grupo Vázquez, before divesting last year.

Investigations indicated that Peña “intervened in decisions concerning the placement, renewal, and retention of public and social security funds at Ueno Bank,” prosecutors said. Evidence includes “meetings held with officials from the Social Security Institute in the context of decisions regarding investments in financial instruments issued by the bank.”

By voting to remove Peña instead of accepting his resignation, lawmakers denied him a lifetime non-voting Senate seat that the constitution grants former presidents — a status that would have afforded him broad immunity from prosecution.

Vice President Pedro Alliana was sworn in as the nation’s new leader on Friday. Alliana, who survived an impeachment vote Thursday, will serve out the rest of Peña’s term, which ends in August 2028.

“We look forward to working with President Alliana and his government,” U.S. Assistant Secretary of State for Western Hemisphere Affairs Juan Pablo Segura said in a post on X. “Paraguay is a strategic partner, friend, and alley of the United States.”

Brazil, Chile, Peru and other countries also wished Alliana success.

The Ueno Bank saga erupted into Paraguay’s biggest political crisis since Congress removed former President Fernando Lugo in 2012 following a deadly confrontation between police and landless peasants.

Regulators seized Ueno Bank early Tuesday, freezing the savings of millions of Paraguayans, including pensioners. That sparked protests in a country where roughly 1 in 3 people held deposits at the lender, even as the central bank begins to reimburse savers from the deposit insurance fund. Some people demonstrated outside Peña’s on Friday.

Government deposits in the lender surged from zero when Peña took office in 2023 to more than $800 million earlier this year. Peña also handpicked a former Ueno executive to lead the nation’s central bank, prompting public scrutiny over cozy ties and lax oversight as the lender’s surging growth went unchecked.

The central bank chief, Carlos Carvallo, resigned this week, while Miguel Vázquez, who owned Ueno Bank, was arrested.

The government has already made payments of 996 trillion guaranies ($155 million) on almost 1.2 million accounts held in Ueno Bank, Alliana said in a post on X Saturday. He also guaranteed all retirement payments and bonuses after money held by the Social Security Institute was caught up in the collapsed bank.

Peña’s removal will likely end a political career marked by shifting party allegiances and a meteoric rise fueled by his alliance with former President Horacio Cartes, the chairman of the ruling Colorado Party and one of Paraguay’s wealthiest businessmen.

Peña joined the party while serving as finance minister under Cartes, who governed from 2013 to 2018. After losing the party’s presidential primary in 2017, he secured its nomination five years later and won election in 2023.

Peña made scores of trips abroad to meet foreign leaders and court investors. The Trump administration forged close ties with his business-friendly government, and the U.S. president praised him as a “young, handsome guy” at a February summit in Washington.

Critics often alleged that Peña was a puppet of Cartes. But he broke with the former president in recent months, further splintering the Colorado Party.

Cartes publicly called for his ouster Thursday, setting in motion a swift impeachment process that led to Peña’s downfall.