A court in Paraguay ordered the pretrial detention of former Central Bank Governor Carlos Carvallo as part of the investigation into Ueno Bank. The decision was made by Guarantee Judge Humberto Otazú following a hearing on November 7.
Carvallo will be held for 15 days in Paraguay’s specialized police unit. After that, the Ministry of Justice and Labor must determine where he will continue to serve the preventive measure. The decision was cited by the Paraguayan newspaper “La Tribuna”.
The former central banker is accused of breach of trust, preparing false official documents and acting for personal gain. The prosecution requested his detention, citing a risk that he could obstruct the investigation.
“The fact that he has already taken active steps to conceal essential information from a state authority constitutes the strongest evidence of the danger of obstructing the investigation,” prosecutors said, as quoted by ABC Color. The prosecution claims that in a letter to the Senate dated October 7, Carvallo omitted technical reports and other documents related to Ueno Bank’s solvency.
Carvallo Surrenders to Police
Carvallo surrendered to police in Asunción on November 6 after the prosecution issued a warrant for his arrest. He resigned as governor of the Central Bank on November 3 amid the crisis surrounding Ueno Bank.
Before taking over as head of the central bank in August 2023, Carvallo had headed Financiera Ueno, which later became Ueno Bank. This previous connection is among the circumstances being examined by prosecutors in their investigation into the oversight of and decisions concerning the financial institution.
Around 3 Million Customers Affected
The crisis began after Paraguay’s Central Bank initiated restructuring proceedings for Ueno Bank. Access to the accounts of around 3 million customers was restricted, with individuals, companies and state institutions among those affected.
The investigation covers the actions of the bank’s executives and the way the institution was regulated and supervised. Carvallo remains accused, and the charges brought against him do not constitute proven guilt. The court is expected to consider the subsequent measures in the case.
Sources: abc.com.py, latribuna.com.py