Home of ousted Paraguayan president raided

Paraguayan prosecutors on Monday raided the home of the ousted president and sought international assistance to trace missing funds from a digital bank whose collapse has triggered financial and political turmoil.

Money trickled back to some Paraguayans hit by the chaotic implosion of Ueno Bank almost a week ago while the nation’s newly appointed president looked to shuffle his Cabinet.

The raid on the Asuncion residence of former Paraguayan president Santiago Pena, who was impeached last week, lasted almost five hours. Documents, cell phones, closed-circuit television footage, tablets and computers were seized.

Prosecutor Elena Fiore, second left, accompanied by organized crime investigators, arrives at the residence of former Paraguayan president Santiago Pena following his arrest on charges of corruption and breach of trust in Asuncion on Monday.

Photo: AFP

“This procedure was quite important, and we believe it is positive because of the amount of documentation we found,” prosecutor Elena Fiore told reporters.

The prosecutor’s office also raided a Ueno Bank branch on the same day and seized documents related to Pena’s investments, based on which it requested cooperation in freezing crypto assets in Luxembourg, the public prosecutor’s office reported.

Pena is in pretrial detention over his alleged links to the bank collapse that locked almost half the population out of their bank accounts, upending the usually stable country.

The Paraguayan central bank, which seized Ueno over solvency concerns, had returned about US$160 million to about 1.2 million people via a guarantee fund on Thursday and Friday.

On Monday, the scheme widened to another section of clients. However, the guarantee fund does not cover reimbursements of more than US$36,000 per account, producing uncertainty about the fate of public funds deposited in Ueno.

Hundreds of workers and teachers on Monday marched through Asuncion, calling for the recovery of pension funds and threatening to stay the course until their demands are met.

Pena’s former vice president, Pedro Alliana, took the reins immediately after his predecessor’s impeachment on Friday.

“We trust that he will take matters into his own hands and remove all the criminals who stole our retirement contributions,” said Maria Fernandez, 62.

Opposition lawmakers failed to gain the necessary support to initiate separate impeachment proceedings against Alliana, who is also allegedly involved in Ueno’s demise.

On Monday, he asked “ministers, secretaries and the highest state authorities who hold positions of trust to submit their resignations.”

“My goal is to strengthen coordination within the government and ensure more efficient management,” he wrote on social media, adding that “all institutions will continue to operate with complete normality.”

Meanwhile, senators unanimously approved Jorge Schreiner as the next central bank chief.

Paraguayan prosecutors said they had also sought help from the US and Argentina to trace and recover assets linked to the collapsed bank.

“Work is under way to locate and secure assets abroad, in order to repatriate them and compensate the victims,” a news release said.

On Sunday, Alliana said US Secretary of State Marco Rubio had called him to reaffirm Washington’s support for its ally.

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 bank handling state pensions and the accounts of several government entities.

Pena owned shares in its holding company until he sold them last year.

He is accused of using his influence as president to steer millions in government deposits to Ueno and of hiding or downplaying its financial woes despite warnings about questionable loans and solvency issues. He denies all charges.

Authorities raided the ex-leader’s holiday home in the lakeside town of San Bernardino over the weekend, where they were attempting to open a vault as part of the banking collapse probe.

Ueno loans partially financed the mansion’s construction, the investigation showed.

Its monthly mortgage payments cost six times more than Pena’s presidential salary, it showed.