Former Paraguayan Central Bank Chief Says He Fears for His Life

Carlos Carvallo, the former president of the Central Bank of Paraguay, told the country’s attorney general’s office on Saturday that he feared for his life, after authorities ordered his arrest. Asked whether he had received threats, Carvallo did not answer.

Carvallo, who previously led Banco Ueno, is being held at Agrupación Especializada, a police barracks and elite unit of Paraguay’s National Police in the capital, Asunción. He has been in custody since the previous day, according to ABC TV. The Paraguayan news outlet reported that he remained silent during his statement and declined to say whether anyone had threatened him or whether he had heard rumors about risks to his physical safety.

Carvallo is being investigated in the same case as former Paraguayan President Santiago Peña. Prosecutors accuse Carvallo of breach of trust, administering for personal gain and producing public documents containing false information. The investigation concerns the collapse of Banco Ueno, described in the report as one of the country’s largest banks. The allegations have not been established as facts.

According to prosecutors, Carvallo may have used his position at the monetary authority to conceal reports about Banco Ueno’s actual financial condition. The Central Bank of Paraguay ordered the bank’s liquidation on Nov. 3, saying it was insolvent, meaning it could not meet its financial obligations. The Public Ministry also sought a criminal investigation of the bank and requested the arrest of two of its executives.

The investigation includes suspicions about the bank’s management and loans made to companies connected to its controlling group. Those loans may have weakened the bank’s assets, according to the report. The Public Ministry also agreed to investigate alleged financial crimes by Peña. Amid the banking crisis, Peña was impeached and arrested, adding to political turmoil in Paraguay.