Former Paraguayan president testifies after imprisonment

Former Paraguayan President Santiago Peña attended the headquarters of the State Public Prosecutor’s Office in Asunción on Saturday morning (7/11) to testify. Peña has been imprisoned since Friday night (6/11), following orders from the courts. The arrest came shortly after the Paraguayan Senate unanimously approved the impeachment of the then president.

Peña was detained by the National Police at his residence, located in the country's capital. The arrest was made immediately after the decision of the Legislative, which withdrew his political immunity. The former president is now answering as an ordinary citizen before the courts.

Investigation points to evidence of financial crimes

According to the courts, evidence of trust abuse and other crimes committed by Peña were found in the banking scandal that rocked Paraguay this week. The Public Prosecutor’s Office began investigating the now former president after a complaint filed by opposition lawmakers. They accused Peña of illicit enrichment, money laundering, corruption and administrative fraud.

The investigations involve suspicions about the bank’s management and loans granted to companies linked to the controlling group, which would have compromised the institution’s assets. The source did not detail the amount of the amounts involved or the names of the companies cited. The investigation is still under investigation, the prosecutor’s office said.

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Banking crisis overthrows government and leads to resignation

Ueno Bank, a digital financial institution, had operations suspended on November 3 by Paraguay’s Banco Central. The monetary authority found the bank insolvent, i.e. unable to honour its financial commitments, and initiated a resolution procedure. The bank was dissolved on Tuesday after Paraguay’s Banco Central (BPC) considered the institution insolvent — when there are no funds to honor financial commitments.

In the midst of the crisis, Santiago Peña even presented his resignation to Congress. The request, however, was not accepted. As a result, the former president was removed from office by impeachment and lost political immunity. The unanimous decision of the Senate reflected the seriousness of the situation and the popular pressure for answers.

Banco Central asks for criminal investigation

The Paraguayan Public Prosecutor’s Office has requested the opening of a criminal investigation into the institution and the arrest of leaders. The measure was taken after the complaint of parliamentarians and the finding of irregularities in the management of Ueno Bank. The request for arrest included the former president, who held management positions before taking over the Executive.

Carlos Carvallo, president of Banco Central since 2023, has resigned. Before assuming monetary authority, he had presided over the Ueno Bank. The resignation of Carvallo occurred amid the worsening of the crisis and raised questions about possible conflicts of interest in the supervision of the bank.

Testimonial can define next steps

This Saturday’s testimony is considered a key piece for the progress of the investigations. Peña must present her version of the facts and answer the prosecutors’ questions. The expectation is that the court will decide in the coming days whether to maintain pre-trial detention or grant provisional freedom to the former president.

In the meantime, the political and financial crisis in Paraguay continues to affect the region. The case raises debates about corporate governance, banking regulation and accountability of public agents. The source did not detail the next steps of the process, but said new hearings are planned for next week.

The Boca no Trombone Portal will continue to follow the development of the case and will bring updates as new information is released by the Paraguayan authorities.

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