Paraguay’s former president Santiago Peña has been ordered into pretrial detention. This comes after prosecutors charged him with breach of trust and using public office for personal gain in a banking scandal that left nearly three million people unable to access their savings.
A judge on Saturday ordered Peña to be held at the Presidential Escort Regiment headquarters, a military facility, rather than a conventional prison. Al Jazeera reports the judge wants Pena kept in the country while prosecutors examine his ties to the collapsed digital lender Ueno.
The scandal centres on allegations that Peña used his political influence to channel hundreds of millions of dollars in public funds into Ueno while shielding the institution from regulatory scrutiny. The bank reportedly received more than US$800 million in public funds during his presidency.
Prosecutors also allege that Peña allowed the state pension fund to deposit US$355 million at the bank, exceeding the legal limit.
Pena denies wrongdoing. He calls the collapse a regulatory matter.
Central Bank chief Carlos Carvallo has also been charged with breach of trust, administration for personal gain and falsifying government documents. He too was ordered into pretrial detention.
Ueno’s collapse triggered protests across Paraguay, with thousands demanding access to their money. Although the Central Bank says 1.2 million customers have received partial or full reimbursement of insured deposits, many remain unable to recover their savings.
The scandal has also plunged the country into political turmoil. Peña was removed from office, and his replacement, Pedro Alliana, is also under investigation over alleged links to the bank’s collapse.
