Paraguayan prosecutors raided the presidential residence as part of an investigation into former President Santiago Peña and the collapse of Ueno Bank.
By Hermes Vector
Paraguayan prosecutors raided the official residence of the country's president on Thursday as part of a probe into the collapse of Ueno Bank, the public prosecutor's office told AFP.
The raid "is part of the investigative proceedings...in connection with the case against the former president," the prosecutor's office said in a statement. Agents from the economic crimes unit were carrying out "technical work aimed at extracting data and gathering information relevant to the investigation" at the early 20th-century building located in capital city Asuncion.
This was the first time in Paraguay's history that the presidential palace has been raided, according to historian Herib Caballero.
The collapse of Ueno Bank blocked millions of Paraguayans from accessing their savings. Former president Santiago Peña, impeached on Friday and currently in pretrial detention, has been accused of using his position to illicitly benefit the financial firm. He denies all charges.
A central bank official, Holger Insfran, was arrested on Thursday during a raid on his home in the capital Asuncion. The central bank's ex-president, Carlos Carvallo, who formerly led Ueno Bank, has already been placed in pretrial detention.
Investigators on Monday raided Peña's private home in Asuncion, seizing documents, cell phones and computers.
The November 3 takeover of Ueno Bank amid major insolvency concerns locked almost half the population of the normally stable country out of their accounts. The central bank said Wednesday it had used a deposit guarantee fund to partially refund around 1.8 million people.
Most of the money held in Ueno however has not been recovered. The number of individuals affected by the crisis surpasses the number of Ueno's direct clients, which held over $800 million in public funds.
Paraguay's emergency services are among the many sectors impacted by Ueno's implosion. The country's volunteer firefighters had around $320,000 deposited in the bank.
Ueno began as a small fintech company with a digital-first model that attracted many low-income customers. Within three years, it became a major player handling state pensions and the accounts of several government entities.
Peña, a 47-year old economist who started his term in 2023, is being held in pretrial detention at a military facility while prosecutors investigate his ties to the bank. Prosecutors allege that Peña used his position as president to influence decisions by government agencies and state-owned entities to keep large amounts of public money deposited at ueno, despite maintaining financial ties to the lender.
The fallout from the collapse pushed credit ratings agency Fitch to place the country's sovereign rating on watch for a possible downgrade.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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