Ex-Paraguayan President Faces Up To 15 Years in Prison Over Bank Scandal

Former Paraguayan President Santiago Peña, a notable supporter of Israel who moved his country's embassy to Jerusalem, is facing up to 15 years in prison if convicted in connection with the Banco O'Ona scandal. Prosecutors allege Peña committed abuse of trust and acted for personal gain. He was impeached and arrested last week following the collapse of the bank, which left millions of customers unable to access their funds.

The crisis erupted when Paraguay's central bank took over Banco O'Ona due to insufficient capital and financial instability. The bank managed approximately $800 to $850 million in public funds, including those from government pension and health funds, impacting about three million clients. Services like app functionality, credit cards, and money transfer were suspended, and even pensioners could not withdraw their savings, sparking protests and calls for the president's removal.

Prosecutors claim Peña interfered in decisions regarding the deposit of significant public and pension fund amounts into the bank, including renewing and maintaining these deposits. Investigators also point to his prior financial ties to the business group that owns the bank. A prosecution document indicates Peña held a 1.58% stake in Banco O'Ona Holding, a deposit in the bank, and a bond in another group company. He reportedly sold these shares in March 2025, while already serving as president.

Peña, 47, who took office in 2023, was impeached by the Senate on charges of poor performance related to the bank's collapse. After his impeachment, he was arrested and officially charged by prosecutors. A court ordered his continued detention to ensure his appearance in court. He is currently being held at a presidential guard facility in the capital, Asunción.