Itaipu Files Criminal Complaint Against Ueno Bank Directors Over $180M in Frozen Deposits

How Itaipu's $180 Million Got Trapped in Ueno Bank

Itaipu Binacional, the Paraguayan-Brazilian entity that operates one of the world's largest hydroelectric dams, has filed a criminal complaint against directors of Ueno Bank in an effort to recover roughly US$ 180 million in deposits trapped at the institution. The bank was placed under intervention by Paraguay's central bank after its solvency ratio fell below half the required minimum, and operations across more than 3 million accounts were halted.

According to Itaipu, the deposits — about US$ 163.8 million plus 115.2 billion guaranis — were held at Ueno as of November 3. The entity said it began banking with Ueno in January 2025, and that the funds represented 7.6% of the more than US$ 2.4 billion it received in remittances from Brazil between 2024 and 2026. Those flows include revenue passed through by Paraguay's national electricity administration, ANDE, and transfers between Itaipu's own accounts to meet contractual and project obligations.

The complaint, filed by Itaipu's executive legal department, targets Ueno's directors, administrators, auditors and other responsible parties. Alleged crimes include fraud, misconduct in crisis situations and failure to keep proper accounting records. Named individuals include Federico Miguel Vázquez Villasanti, Juan Manuel Gustale, Julio Daniel Rey Fernández and Diana Leticia Mongelos González, among other board and audit committee members. Itaipu is asking that the facts be examined alongside an existing criminal investigation into the bank, and reserves the right to join the case as an assistant to the prosecution and seek damages.

The case has taken on political dimensions because Paraguayan public institutions, including the social security institute IPS, also held deposits at Ueno. Public-sector and IPS funds at the bank totaled about 4.9 trillion guaranis, or roughly R$ 4.2 billion. The Paraguayan newspaper ABC Color reported that those deposits were not withdrawn even after the central bank opened a procedure in September to investigate transactions between companies linked to the bank.

Why Paraguay's Public-Deposit Problem Goes Beyond Ueno

Why Itaipu Was Banking With Ueno at All

Itaipu's decision to place a significant share of its Brazilian remittance flows with Ueno starting in January 2025 now looks like a concentration risk that materialized quickly. The deposits equaled 7.6% of the more than US$ 2.4 billion received from Brazil over 2024–2026 — a meaningful slice of operating liquidity for an entity with contractual and project commitments. The complaint's inclusion of funds routed through the Fundação Parque Tecnológico Itaipu-Paraguai suggests the exposure extended beyond direct accounts into project-specific vehicles, which could complicate recovery if legal ownership sits with the foundation rather than Itaipu itself.

The Public-Deposit Dimension

The political sensitivity comes from the roughly 4.9 trillion guaranis held by Paraguayan public bodies and the IPS. The source reports these deposits were not withdrawn even after the central bank opened an investigation in September into transactions between companies linked to Ueno. That raises questions about internal controls and oversight at public institutions — questions that will likely intensify as the criminal case proceeds. For context, banking crises involving public deposits typically trigger legislative scrutiny and can accelerate regulatory tightening, though the source does not indicate any specific policy response yet.

What the Solvency Failure Signals

The central bank's finding that Ueno's solvency ratio was below 50% of the minimum points to a severe capital shortfall, not a temporary liquidity squeeze. The halt of operations across more than 3 million accounts indicates the intervention is broad, and the criminal complaint's allegations of accounting violations suggest the true financial position may have been obscured. Itaipu's move to join the existing criminal investigation is a procedural step to avoid duplicate proceedings, but it also signals that recovery through normal bankruptcy channels may be slow or uncertain.

Winners and Losers

The clearest losers are Ueno's depositors — Itaipu, the IPS and other public entities — whose funds are frozen pending resolution. Itaipu's legal action may improve its standing as a creditor, but recovery timelines are unclear. Paraguay's central bank faces reputational scrutiny over how a bank with significant public deposits reached this state, and the IPS may face pressure over its failure to withdraw funds after the September investigation was opened. No clear commercial winners are identifiable from the source.

What the Ueno Intervention Means for Exposed Creditors

For creditors and depositors exposed to Ueno Bank, the priority is securing legal standing in the ongoing criminal and intervention proceedings before recovery timelines are set.

• 0–6 months: Creditors should verify whether their deposits are held directly or through intermediary entities — Itaipu's complaint shows that funds routed via the Fundação Parque Tecnológico Itaipu-Paraguai required separate legal arguments. Confirm registration with the central bank's intervention process and assess whether joining the criminal case as an assistant to the prosecution, as Itaipu is seeking, improves recovery prospects.
• 6–24 months: Monitor the central bank's findings on Ueno's true solvency position and any asset-recovery plans. The outcome will shape how much of the roughly US$ 180 million in Itaipu deposits and the 4.9 trillion guaranis in public funds can be recovered. Public institutions including the IPS will likely face audits or legislative questions about why deposits remained after the September investigation opened.
• 2–5 years: Expect regulatory changes in Paraguay around concentration limits for public-entity deposits and enhanced reporting requirements for banks holding state funds. Institutions with similar exposure should review their counterparty concentration policies now.

Metrics to watch: the central bank's final solvency assessment of Ueno; the status of the existing criminal investigation and whether Itaipu is admitted as assistant to the prosecution; any announced recovery rate or asset liquidation plan; and whether the IPS or other public bodies disclose revised deposit figures or oversight measures.