Paraguayan prosecutors have charged former president Santiago Pena with criminal association over his alleged role in the collapse of the digital bank Ueno , a week after Congress removed him from office.
The prosecutor’s office announced the new charge on Friday, adding to the breach of trust and self-dealing charges already facing Pena, who is being held in pretrial detention at a military facility.
The 47-year-old former leader is accused of using his position to direct millions in government funds to Ueno and concealing or downplaying its financial troubles, despite warnings of risky lending practices, while having financial ties to the bank.
Pena, who entered office in 2023, held a stake in the bank’s holding company until last year.
On Thursday, investigators raided his official residence in the capital, Asuncion. The prosecutor’s office said agents from the economic crimes unit were extracting data and gathering relevant information for the investigation.
Last week, Pena tried to step down as president, but Congress rejected his resignation, instead removing him from office through impeachment. Pena was arrested shortly after his removal.
The collapse of Ueno left customers locked out of their accounts, prompting huge protests across the country as thousands demanded accountability and their money back.
Prosecutors had been looking for missing funds and said on Friday that assets had been located abroad, although they did not specify in which countries. They had previously asked the United States, Luxembourg and Argentina for help locating the missing money.
“The necessary steps are under way to request that they be frozen,” prosecutor Francisco Cabrera told reporters.
Three former central bank officials were also arrested on Friday, accused of having known about Ueno’s issues since late last year.
The bank, which held more than $800m in public funds, grew quickly under Pena’s presidency from a financial technology company into a large firm handling state pensions and the accounts of several government entities.
The credit ratings agency Fitch has placed Paraguay’s sovereign rating on watch for a possible downgrade, which would make it more expensive for the government to borrow money.
On Thursday, the Central Bank said it had returned savings to more than 1.8 million people who had deposited money at the bank.
