Police in Paraguay have raided the home of former President Santiago Pena as part of an investigation into a banking crisis that led to his removal from office and criminal charges against him. Last week, authorities intervened to seize Ueno Bank, a popular online lender that held accounts for nearly half of Paraguay's 6.5 million residents, along with more than $800 million in government funds.
The bank's collapse sent shockwaves across the normally stable country, triggering street protests. Pena is currently being held in custody at a military facility. Pena, who took office in 2023, previously owned shares in Ueno Holding, the bank's parent company, before selling them last year. He is accused of abusing his presidential influence to direct millions of dollars in government deposits to Ueno Bank. He also allegedly concealed or played down the bank's financial difficulties despite receiving warnings about questionable loans and solvency concerns.
Prosecutors confirmed in a statement that Pena's residence had been raided as part of the investigation into the bank's collapse. According to prosecutors, Ueno Bank accepted deposits from government institutions while issuing questionable loans to businesses associated with the bank's executives.
Pena's mansion located outside Asuncion is also under investigation. The indictment alleges that he obtained two loans from Ueno Bank in 2024, worth approximately $500,000 combined, to finance the construction of the property. The charging document states that his monthly mortgage payment amounts to $38,000, six times his monthly salary as president. On Friday, the Senate voted to remove Pena from office, with Vice President Pedro Alliana taking over as his successor.
Alliana said on Sunday that the government had reimbursed 1.2 million Ueno Bank customers whose funds were frozen following the bank's collapse. He said the payments had reached approximately $158 million so far, with the reimbursement process scheduled to continue this week.
