Paraguay's Senate removed President Santiago Peña from office Friday, and he was detained minutes later as the collapse of digital lender Ueno Bank left nearly 3 million people unable to reach their money.
Senators voted 44-0, with one member of the 45-seat chamber abstaining, a day after the Chamber of Deputies impeached him 78-0. Vice President Pedro Alliana, 52, was sworn in as the country's 53rd president and will serve out the term, which ends in August 2028.
Peña had announced his resignation Thursday, but lawmakers refused to accept it. Convicting him instead stripped him of the lifetime Senate seat and legal immunity that Paraguay's Constitution grants former presidents, leaving him open to prosecution.
I take my leave with gratitude, while fully acknowledging the anguish of those who are currently awaiting answers
Santiago Peña, ousted president of Paraguay
Prosecutors ordered him held at home on suspicion of breach of trust and other crimes, pending a decision on final charges. They are examining whether he used his political influence to benefit Ueno, where he once held shares, and are looking at possible illicit enrichment, money laundering, influence peddling and misappropriation of funds.
An arrest warrant was also issued for Carlos Carvallo, the former central bank chief who resigned earlier in the week. Prosecutor Elena Fiore Franco said Peña cooperated when officers arrived, voluntarily letting them into his residence.
Peña has denied wrongdoing, and his attorney, Ricardo Preda, called the allegations irresponsible and opportunistic. Peña skipped Friday's Senate hearing and sent his lawyers, after asking earlier in the day for more time to prepare a defense.
How Ueno collapsed
The central bank ordered Ueno into resolution Tuesday after its solvency ratio fell below half the required minimum. The bank's app, card payments and transfers stopped, branches closed, and accounts used to process pension payments were frozen. Ueno served about 2.94 million customers, roughly 60% of the country's adults.
Impeachment articles filed by opposition lawmakers and dissidents in Peña's Colorado Party accused him of conflicts of interest, misuse of pension funds and institutional cover-ups. They cited two loans he received from Ueno and alleged interference in the Social Security Institute, which held $355 million at the bank. Peña sold his shares in Ueno Holding in April 2025.
Lawmakers also questioned his 2023 appointment of Carvallo, who had chaired Financiera Ueno; the central bank approved that company's conversion into a bank 83 days after Carvallo took over. Ueno said last month it held roughly $800 million in public-sector deposits.
Peña's position crumbled Thursday when Colorado Party leader Horacio Cartes and Congress President Basilio Nunez withdrew their support. Cartes, a former president, said the party would not side with the theft of public, private and pensioners' funds.
Compensation and charges
Alliana pledged that depositors would be fully compensated. The Deposit Guarantee Fund began reimbursing eligible customers Thursday, with initial payments of about $18,700 each and full guaranteed coverage of about $37,000.
The new president carries his own exposure: he is suspected of involvement in the Ueno scandal, which he denies, though the lower house declined to open impeachment proceedings against him.
Authorities have detained eight senior Ueno executives, including founder Miguel Vazquez and bank president Juan Manuel Gustale. At least 27 people face charges, including breach of trust and attempted fraud.
Peña, a former finance minister who took office in August 2023, was one of President Donald Trump's key allies in the region, and U.S. officials including Secretary of State Marco Rubio repeatedly praised him as a strategic partner.
