Paraguay’s Pena charged over bank collapse
ASUNCION, Paraguay — Prosecutors in Paraguay on Saturday charged recently deposed former President Santiago Peña with two crimes linked to the collapse of a major bank that has jeopardized the savings of hundreds of thousands of account holders and unleashed the nation’s biggest political crisis in a decade.
In a press conference Saturday, Nancy Salomón, the South American nation’s chief prosecutor for corruption and economic crimes, said Peña would be investigated for the crimes of breach of trust and administration for personal gain.
Peña’s removal marks a major crisis for Paraguay, which returned to democratic rule in 1989. Since then, the nation of 6 million people has been mostly governed by the conservative Colorado Party, of which Peña was a member.
Prosecutors said the former president could face up to 20 years in prison if he is found guilty of both crimes and have asked a judge to freeze Peña’s assets and send him to prison while investigations continue.
Insider lending
Later on Saturday, Paraguayan Judge Humberto Otazu complied with that request and said Peña will be held at a military base as investigations continue, in order to “guarantee his compliance” with the anti-corruption probe.
On Tuesday, regulators in Paraguay intervened in Ueno Bank, freezing the accounts of nearly 3 million customers and triggering a political crisis that led to Peña’s removal by Congress on Friday night.
Earlier on Saturday, Peña was questioned by prosecutors at the Attorney General’s compound, in the capital Asuncion. The former president was not in handcuffs but was escorted by police.
Lawmakers accused Peña of using his political influence to steer hundreds of millions of dollars in public funds into Ueno while regulators overlooked risky insider lending. Peña has denied wrongdoing.
Partial reimbursement
Paraguayan prosecutors on Friday ordered the arrest of Peña and former Central Bank chief Carlos Carvallo as part of a criminal investigation into alleged breach of trust and other offenses tied to the collapse of Ueno Bank.
