Paraguay’s Santiago Peña arrested after Senate ousts him over bank collapse

Paraguayan authorities arrested former President Santiago Peña on Friday after the Senate removed him from office over the collapse of Ueno Bank, which froze access to accounts held by nearly 3 million customers.

Peña was an outspoken supporter of Israel. He reopened Paraguay’s embassy in Jerusalem in December 2024 and said at the ceremony that his country would stand by Israel.

All 44 senators present voted to remove Peña for misconduct in office, pressing ahead with impeachment after he offered to resign on Thursday. Regulators had taken control of Ueno Bank on Tuesday.

Prosecutors were investigating Peña on suspicion of breach of trust and influence peddling, among other offenses. Lawmakers accused him of steering hundreds of millions of dollars in public funds to Ueno while regulators overlooked risky lending to companies linked to the bank. Peña denied wrongdoing.

Peña was initially placed under house arrest in Asunción. Police moved him to the headquarters of the presidential guard late Friday for security reasons after protesters gathered outside his home. He was due to appear before prosecutors on Saturday.

Vice President Pedro Alliana was sworn in on Friday to serve the rest of Peña’s term, which ends in August 2028. Alliana said depositors affected by the collapse would be fully compensated.