Paraguayan authorities have raided the residence of former President Santiago Peña as part of an expanding criminal investigation into the collapse of Ueno Bank, a major financial institution whose failure has frozen millions of customers’ savings and triggered one of the country’s most serious political crises in recent years.
The search, conducted on Sunday, November 8, at Peña’s summer residence in San Bernardino, approximately 50 kilometres from the capital, Asunción, marks a significant development in an investigation that has already resulted in his removal from office, arrest and formal criminal charges.
Prosecutors and officers from Paraguay’s National Police searched the property in the Ciervo Cuá area of the Cordillera Department, seeking evidence connected to allegations that Peña used his presidential influence to benefit the bank while maintaining financial and business connections to its corporate owners.
According to reports by local media, investigators discovered a concealed vault behind a false wall inside the property. The vault reportedly had an advanced security system that prevented investigators from opening it during the initial search. Authorities had not publicly confirmed whether documents, valuables or other evidence had been recovered by the time of reporting.
The raid was led by prosecutors Christian Benítez, Silvia González Véster and Elena Fiore, according to reports from Paraguayan media and the Attorney General’s Office.
The development adds another dimension to a scandal that has shaken public confidence in Paraguay’s banking system, intensified political divisions and raised difficult questions about the relationship between political power, financial institutions and the management of public money.
How the Ueno Bank crisis unfolded
The controversy centres on Ueno Bank, a rapidly expanding digital-first financial institution that became one of Paraguay’s significant lenders.
The bank served approximately 2.9 million customers in a country with a population of around 6.5 million, giving it a substantial presence in the country’s financial system. Its rapid expansion attracted millions of individual customers and substantial deposits from public institutions.
However, concerns over its financial position intensified after regulators examined its accounts and identified serious weaknesses in its capital adequacy.
On November 2, 2026, the Central Bank of Paraguay intervened in the institution after adjustments to its financial statements showed that its solvency ratio had fallen below half the legally required minimum.
The intervention effectively placed the bank under official control and left millions of customers unable to access their deposits.
The scale of the disruption was considerable. Ueno reportedly held between $800 million and $850 million in public funds, including money belonging to state institutions and the country’s social security system.
The collapse also exposed questions about the bank’s lending practices, particularly allegations that it extended questionable loans to businesses connected to its owners and executives.
Regulators and prosecutors are now examining whether financial irregularities were overlooked and whether political connections helped the institution maintain access to public deposits despite growing concerns about its financial health.
Why investigators are examining Peña
At the centre of the investigation is Peña’s previous financial relationship with the corporate group behind Ueno Bank.
Before becoming president in August 2023, Peña acquired 1,500 shares in Credicentro in March 2019. The company later became part of the corporate structure associated with Ueno Holding.
According to the prosecution’s allegations, Peña retained his financial interest during the first years of his presidency before selling his stake in April 2025.
Investigators are examining whether this relationship created a conflict of interest and whether his administration helped direct public funds towards the financial institution.
The prosecution alleges that public institutions and the Instituto de Previsión Social (IPS), Paraguay’s social security institution, placed substantial deposits with Ueno during the period under investigation.
The amounts cited in the investigation include approximately 3.6 trillion Paraguayan guaraníes and an additional $233.4 million.
Prosecutors allege that Peña intervened in decisions concerning the placement, renewal and continued retention of these public funds at the bank.
The investigation estimates the alleged financial damage at approximately $809.5 million.
These are allegations that must be tested through judicial proceedings. The existence of deposits or a previous business relationship does not, by itself, establish criminal wrongdoing.
The controversial loans used to finance Peña’s residence
One of the most closely examined aspects of the investigation concerns the former president’s summer residence in San Bernardino the same property targeted in Sunday’s police operation.
According to the prosecution’s case, Ueno Bank granted Peña two loans in May 2024, while he was serving as president.
The loans reportedly totalled 3.548 billion guaraníes, equivalent to approximately $577,000 to $600,000, depending on the exchange rate used.
Investigators allege that the money was intended to finance construction of the residence, which reportedly cost approximately 7.7 billion guaraníes, or around $1.3 million.
The prosecution has also drawn attention to the repayment arrangements.
According to the indictment, the monthly instalments amounted to approximately 239 million guaraníes, significantly exceeding Peña’s monthly presidential salary of 37.9 million guaraníes.
Prosecutors say the payments were equivalent to roughly six times his official monthly remuneration.
The discrepancy has become an important element of the investigation into the source of the funds used to finance the property and the nature of Peña’s relationship with the bank.
The discovery of the concealed vault during Sunday’s search has attracted additional attention. However, investigators have not established publicly what it contains, and its discovery should not be treated as proof of concealed criminal proceeds.
Impeachment, arrest and the fall of a president
The banking scandal rapidly escalated into a political crisis.
As customers demanded access to their savings and protesters took to the streets, pressure mounted on Peña’s administration.
The Senate voted on November 6 to remove him from office following impeachment proceedings centred on allegations of misconduct in connection with the banking crisis.
The vote was unanimous, with 44 senators supporting his removal.
Peña had submitted his resignation shortly before the proceedings concluded, but lawmakers proceeded with the impeachment process.
Vice-President Pedro Alliana subsequently assumed the presidency.
Following his removal, prosecutors ordered Peña’s arrest as part of the criminal investigation. He was initially placed under house arrest before being transferred to a military facility in Asunción.
On November 7, prosecutors formally charged him with alleged breach of trust and administration for personal benefit. He was also investigated over allegations involving the misuse of public office and financial interests connected to the bank.
Former Central Bank chief Carlos Carvallo, who had resigned amid the scandal, was also implicated in the investigation.
The legal proceedings are ongoing, and the charges against Peña remain allegations rather than established findings of guilt.
Millions of customers caught in the banking collapse
Beyond the political consequences, the crisis has had a direct impact on ordinary Paraguayans.
Ueno’s approximately 2.9 million customers include individuals, businesses, pensioners and public institutions.
When the Central Bank intervened, customers found themselves unable to access money held in their accounts. The disruption caused widespread anxiety, particularly among people who depended on their savings to meet daily expenses.
Among those affected were pensioners whose funds were connected to the Instituto de Previsión Social.
The government has begun using Paraguay’s Deposit Guarantee Fund to reimburse eligible customers.
The statutory guarantee covers deposits up to 228.3 million guaraníes, approximately $38,000 per depositor.
According to Central Bank figures reported during the crisis, approximately 1.196 million customers had received payments totalling around $160 million by the end of the first reimbursement phase.
The authorities have indicated that further payments will continue.
However, customers whose deposits exceed the statutory guarantee face greater uncertainty. The recovery of uninsured balances will depend on the eventual resolution of the bank’s assets and liabilities.
The crisis has therefore raised questions not only about regulatory supervision but also about the vulnerability of households and public institutions when a major financial institution fails.
Public anger and pressure on the new administration
The bank’s collapse triggered demonstrations in Asunción and other parts of the country.
Protesters demanded access to their frozen savings, accountability for those responsible and stronger protection of pension funds and public resources.
Some demonstrations turned violent, with police using crowd-control measures to disperse protesters. There were reports of arrests and injuries during confrontations.
The removal of Peña did little to immediately resolve the underlying financial concerns.
His successor, Pedro Alliana, has promised that customers affected by the collapse will not be abandoned and that the government will work towards reimbursing those who lost access to their money.
Nevertheless, the new administration faces a difficult task: restoring confidence in the banking system while ensuring that the investigation proceeds without political interference.
The fact that both Peña and former Central Bank officials are under investigation has also placed the country’s financial regulatory institutions under intense scrutiny.
