Paraguay's President Arrested on Charges of 'Breach of Trust'

Asuncion (Agencies): Outgoing Paraguayan President Santiago Peña was detained after being taken to the Attorney General’s office for questioning on Saturday, hours after his removal from office by parliament amid the collapse of a major bank. Footage broadcast by local television channel Telefuturo showed Peña arriving at the Attorney General’s complex in a black SUV, escorted by security personnel, with his hands untied.

The Public Prosecutor’s Office filed charges against the Paraguayan president for “breach of trust and mismanagement for personal gain,” and requested that he be held in pretrial detention on account of his alleged responsibility for the banking scandal. It also called for the arrest and asset freeze of former Central Bank Governor Carlos Carvallo, who faces the same charges.

The 47-year-old conservative president, a close ally of Washington whose term was scheduled to end in 2028, was ousted on Friday after the Senate unanimously voted to convict him in connection with the collapse of the Oneyo bank.

The banking crisis, which quickly escalated into a political crisis, erupted last Tuesday when the Central Bank placed the once-thriving digital bank Oneyo under guardianship due to its financial troubles. The central bank’s intervention froze the deposits of nearly 3 million people, according to the bank’s stated customer base—roughly half of Paraguay’s population. The fallout also affected companies, institutions, and pension funds.

On Saturday, the Central Bank announced that 1.2 million Oneyo customers had received partial or full compensation for their insured deposits, in accordance with Paraguayan law.

Peña, who had ties to the group controlling the bank, had offered his resignation. However, lawmakers proceeded with the impeachment process to strip him of the political immunity he would have retained had he stepped down voluntarily.