Former Paraguayan President Santiago Peña Detained Pending Trial

A judge in Paraguay on Saturday ordered former President Santiago Peña to be held in pretrial detention at a military facility until prosecutors complete their investigation into his connections with the digital bank "Unoino," whose collapse left millions of customers struggling to access their accounts.

Judge Humberto Otazú ordered Peña's detention, who has been charged with breach of trust and seeking personal gain, stating that incarceration is necessary to ensure he remains in the country during the proceedings.

This detention, which came one day after Peña was removed from office, deepens the political and financial crisis that sparked protests in Asunción, extended to senior officials, and prompted regulatory bodies to attempt to contain risks threatening the entire financial system.

Peña's lawyer, Ricardo Breda, told reporters that the ousted president pleads not guilty to the charges against him.

Breda said: "We will undergo the investigation, and I am confident that the result will be his acquittal when this investigation concludes."

Otazú also ordered the pretrial detention of former Central Bank President Carlos Carvallo at a detention center after prosecutors charged him with breach of trust, forgery of official documents, and seeking personal gain.

Prosecutors stated that Peña exploited his position as president to influence decisions by government agencies and state-owned entities to keep large sums of public funds deposited in "Unoino" bank, despite maintaining ongoing financial relationships with the bank.

Prosecutors argue that this relationship created a conflict of interest, as Peña encouraged, facilitated, or influenced decisions that benefited the bank.

Peña, who was a shareholder in Unoino's holding company until March 2025, denied any wrongdoing, stating that the bank's problems were a matter of regulation.

Peña arrived at the Public Prosecutor's Office early yesterday, Saturday, to appear before prosecutors following his dismissal from office on Friday. His removal led Vice President Pedro Alliana to assume power, with the veteran politician from the ruling Colorado Party taking the oath on Friday to complete Peña's term until August 2028.

Public Prosecutor Nancy Salomon said that the two charges against Peña could carry prison sentences of up to 10 years each.

Carvallo had resigned as Central Bank President earlier this week amid the escalating crisis surrounding Unoino bank, having previously headed the digital bank until 2023.

The Central Bank announced on Saturday that the equivalent of $160 million had been paid to nearly 1.2 million savers under the government deposit guarantee scheme.