Paraguay’s political and financial crisis enters its sixth day on Sunday, 8 November 2026, with prosecutors expected to advance the progress of criminal investigation cases against former President Santiago Peña and former Central Bank of Paraguay (BCP) President Carlos Carvallo for their roles in the Ueno Bank scandal. Both continue in preventive detention under an order issued on Saturday.
The pair were charged on Saturday with offences including breach of trust and self-serving administration linked to Ueno Bank, whose handling of substantial public and pension funds has affected around two million savers and placed millions of dollars of state resources at risk. Political reactions continue under the new presidency of Pedro Alliana, while the Central Bank manages the Ueno Bank resolution and ongoing payouts to savers.
Ueno Bank scandal: Prosecutor files charges
The Public Prosecutor’s Office charged former President Peña and former BCP President Carlos Carvallo and requested the court to order the preventive detention of both, a request the judge granted stating detention was necessary to ensure them remaining in the country while the case proceeds.
Former President Peña is charged with the alleged crimes of breach of trust and self-serving administration, while Carvallo is charged with breach of trust, immediate production of false public documents, and self-serving administration. The Prosecutor’s Office further requested a general prohibition on selling or encumbering assets with respect to both defendants and the issuance of orders to identify the bank accounts and other financial assets of both.
Links to Ueno Bank and public funds
The prosecutor’s document that orders the indictment details the links between both former President Peña and the former president of the BCP with the financial entity Ueno Bank, whose resolution has affected almost 2 million savers and created the risk of losing millions of dollars in public funds.
According to the prosecution’s hypothesis, between 2023 and 2026 Ueno Bank allegedly received significant deposits and placements from public and pension entities, while also carrying out credit operations with companies linked to its economic group that presented alleged irregularities.
According to the report from the General Directorate of the Public Treasury of the Ministry of Economy and Finance, as of September 2026, the funds corresponding to state agencies and entities deposited in Ueno Bank would have reached approximately ₲3,608,550,782,201 (approximately US$576.6 million) and US$233,400,495.
Allegations concerning former President Peña
Regarding former President Santiago Peña, the investigation indicates that, during his time as President of the Republic, he allegedly intervened in decisions related to the placement, renewal, and permanence of public and pension funds in Ueno Bank, an entity with whose business group he allegedly maintained economic and corporate relations.
Among the background information incorporated into the investigation are his shareholding in Ueno Holding SAECA, subsequent operations related to said shares, and meetings held with authorities of the Social Security Institute (IPS), in the context of decisions related to investments in financial instruments issued by the banking entity.
According to prosecutor Nancy Salomón, the charges against Peña could carry a sentence of up to ten years in prison each. Peña’s attorney, Ricardo Preda, told journalists that Peña was pleading not guilty to the charges.
“We will submit to the investigation and I am sure that when this investigation is over, the result will be the dismissal,” Preda said.
Investigations into Carlos Carvallo
Regarding Carlos Dagoberto Carvallo Spalding, former BCP President, the Prosecutor’s Office is investigating his actions in the authorisation, regulation and supervision processes of Ueno Bank, as well as his previous connection with Financiera Ueno and the technical observations related to credit exposure limits, operations with related companies and equity aspects of the entity.
Also under investigation is a communication sent to the Senate on 7 October 2026, the content of which, according to the prosecution’s hypothesis, would present differences with respect to reports and technical observations existing in the Central Bank of Paraguay.
Carvallo resigned as BCP President recently, as the banking crisis escalated. He had previously headed Ueno Bank until 2023.
Itaipu announces legal measures to recover millions
On the same day, Itaipu Binacional reported that it initiated legal action before the Attorney General’s Office to recover ₲115.2 billion and US$163.8 million that the entity held in the intervened Ueno Bank. In a statement released on Saturday, Itaipu Binacional announced that in January 2025 it had begun operations with Ueno Bank as part of its policy of diversifying available funds among banks in the financial system.
The funds represent 7.6% of the resources received by remittances from Brazil during the period in question, and include income received from the National Electricity Administration (ANDE) and transfers between accounts of the entity according to the flow of available cash directed to the fulfilment of contractual obligations and commitments derived from agreements.
Itaipu emphasised that all necessary steps are being taken to recover the funds after the Ueno Bank scandal while ensuring uninterrupted operations in fulfilment of its contractual obligations.
