November 11, 2026
Paraguayans protest Ueno bank collapse in the capital of Asunción, Nov. 5, 2026. Photo: @coinbureau
The following article, which describes the scheme through which nearly 3 million of Paraguay’s 7 million people lost access to their money, was originally published by El Surti, a Paraguayan independent media collective founded in 2016. Resumen Latinoamericano posted it on Nov. 7, 2026. Paraguay is a landlocked country located in the central region of South America. It borders Argentina, Bolivia and Brazil.
The political significance of the ongoing corruption scandal is not only that it may depose a recently elected, right-wing government. It has also created a life-changing crisis for millions of people and demands political action. This is happening only weeks after the ultraright Bolsonaro family’s party lost the presidential election to Lula da Silva in Brazil. Translation: Workers World
On Tuesday, Nov. 3, 2026, nearly 3 million Paraguayans — about half the population — woke up unable to access their money. At 3:24 a.m. the Central Bank of Paraguay (BCP) announced on X the closure of Ueno Bank, a digital bank linked to President Santiago Peña, due to insolvency. The savings of thousands of families were deposited there, as well as $800 million in public funds.
That same day, the Prosecutor’s Office issued arrest warrants for eight bank executives based on a complaint filed by the BCP. The main suspect is Federico Miguel Vázquez, first vice president of Ueno and founder and majority shareholder of the Vázquez Group — a conglomerate of at least 28 companies that are part of an alleged scheme involving the bank’s deposit-gathering and fraud activities.
On Wednesday, Nov. 4, the Prosecutor’s Office charged 27 executives of the group — including the initial eight — with crimes of misconduct in crisis situations and breach of trust. That afternoon, lawmakers from the opposition to the government introduced a bill to impeach Peña. In the streets of the capital, police used rubber bullets, tear gas and water cannons to crack down on anti-government protesters.
At 10 a.m. on Thursday, Nov. 5, the Chamber of Deputies began impeachment proceedings to remove the president from office. But at 1:30 p.m., Peña resigned before he could be removed. The Senate attempted to accept his resignation, but the impeachment process prevailed and will continue this Friday. At the same time, a judge ordered that the eight Ueno executives be held in preventive detention.
That same Thursday morning, opposition senators filed a complaint against Peña with the Office of the Prosecutor for Economic Crimes, the same agency investigating the Ueno Bank executives.
Opposition Senator Esperanza Martínez said: “He should be charged, and his assets should be confiscated. The money they stole must be recovered and used to pay the people.” The complaint also names members of the BCP board of directors, such as Carlos Carvallo Spalding, who was an executive at Ueno Bank before becoming president of the state-owned bank during Peña’s administration.
If the Prosecutor’s Office investigation proves the crimes attributed to the executives of Ueno Bank and the Vázquez Group, as well as the complicity of Santiago Peña and members of the BCP, this case would be on par with or even larger than the Banco Master scandal in Brazil — linked to the Bolsonaros — which affected nearly 2 million Brazilians. There is also a latent fear that a social and economic crisis will deepen, with various medium- and long-term ramifications.
The maneuvers that enabled a scheme to defraud public funds
The growth of Ueno Bank and the Vázquez Group had been meteoric. In fewer than five years, it amassed a portfolio of millions of customers. But this growth was aided by political power following Santiago Peña’s inauguration as president of Paraguay in August 2023.
Since then, various legal and political maneuvers have enabled the growth of this economic group:
Manipulation of Social Security Institute (IPS) regulations in favor of Ueno Bank. Three months after Peña took office, the newspaper ABC Color reported that the board of the Social Security Institute lowered the requirements for a bank to receive its funds, which allowed Ueno to qualify. A year later, the limit on the amount of assets the IPS could deposit in a bank was also eliminated.
Ueno retained nearly $350 million from the Common Retirement and Pension Fund, representing about 9% of the money belonging to current and future retirees. Now, with the bank’s closure, the whereabouts of that money is unknown, as are the mechanisms by which it might be recovered.
Amendment to the law on conflicts of interest and the revolving door. In late 2023, Congress weakened the conflict-of-interest law, which facilitated the appointment of former officials from Ueno Bank and Banco Basa — owned by former President Horacio Cartes — to strategic positions in the economy and the allocation of contracts to the Vázquez group, in which Peña held shares. Peña himself is a case of the revolving door; he was a member of the BCP board of directors, Minister of Finance in the Cartes administration, later director of Banco Basa and then President of the Republic.
The bank’s rapid growth. In November 2021, the Vázquez Group acquired Financiera El Comercio, which had been in the market for over 40 years. A month later, with BCP’s approval, it was renamed Ueno. At that time, Carlos Carvallo Spalding was president of the finance company and Federico Miguel Vázquez was the CEO.
When Peña took office as president in 2023, Carvallo Spalding became president of the BCP. By November of that same year, the BCP, with Carvallo at the helm, authorized Ueno to begin operating as a bank.
The president’s shares in Ueno Holding. In 2019, Peña was a shareholder in Credicentro, a credit company belonging to the Vázquez Group, which was renamed Ueno Holding in 2022. In 2023, Peña quadrupled his shares, coming to hold 6 billion guaraníes in the company (about 1 million dollars at the current exchange rate), according to a report by El Surti. In March 2025, following constant media reports, the president announced the sale of his shares.
Favoritism in government contracts for the Vázquez Group. From August 2023 to August 2026, the Vázquez Group was awarded 145 public contracts totaling nearly $40 million. El Surti revealed in 2024 that ITTI alone — the group’s technology company — had already received more contracts than under the previous government, including the development of the Banco Nacional de Fomento’s online banking system and the integration of financial databases for Che Róga Pora, a public housing [mortgage] policy.
The consequences of the crisis are being felt by thousands of workers
Millions of Paraguayans are out of money. The savings of 2.9 million Paraguayans who held accounts at Ueno were affected. Among them were 32,000 retirees. The government has decided to draw on a guarantee fund — a mechanism for protecting bank savings established by law — to return money to savers with balances of up to 75 times the minimum wage, approximately $37,000.
Mass layoffs at the Vázquez Group and Ueno Bank. With the bank’s closure, the Group ran out of capital. All employees of the bank and affiliated companies received their salaries through Ueno. There is still no consensus [on the exact number], but the number of affected workers ranges between 4,000 and 6,000. Among them are 200 media workers who lost their jobs and filed a class-action lawsuit against the Vázquez Group.
Workers abroad left in limbo. The Vázquez Group’s ITTI company has a branch in Argentina with nearly 800 workers hired by Kaitel SRL. They, too, do not know what will happen to their jobs or severance pay.
This is how the scheme was devised to siphon off public funds for an economic group
Between 2025 and 2026, Ueno’s board of directors authorized loans worth millions to companies belonging to the same economic group that controlled it. The loans were granted without collateral and for amounts far exceeding what those firms could afford to repay. That money ended up in other companies within the Vázquez Group.
According to the Prosecutor’s Office, the central figure is Federico Miguel Vázquez, who was simultaneously the bank’s ultimate owner, its vice president and the person who controlled the companies receiving the funds.
Control of the bank passed through a chain of companies. The direct owner of Ueno Bank is U Paraguay S.A., which holds 91.21% of the capital, according to the rating agency FIX. In turn, U Paraguay belongs to U Holdings, a company that the Vázquez Group established in Luxembourg 45 days after Santiago Peña took office as the country’s president.
In that European holding company, the Vázquez Group held 86.73% of the capital, OTP Bank — Hungary’s largest bank — held 9.99% and the remainder belonged to minority shareholders. Francisco Peña, the president’s brother, held shares in the Luxembourg company.
As part of the intervention, the courts ordered preventive seizures totaling USD 70 million and 1.62 trillion guaraníes from the assets of executives and those of U Paraguay, U Holdings and the Vázquez Group.
Separate from that chain is Ueno Holding, in which Santiago Peña held shares. Its shareholders included the Vázquez Group, Ueno Seguros and ITTI.
At the center of the money trail is ITTI, the group’s technology company. Its shareholders were the Vázquez Group, Ueno Seguros and Ueno Bank itself, which held nearly 17% of the company — approximately 68,000 million guaraníes, or 11 million dollars at the current exchange rate. The bank not only funneled money to ITTI through loans but was also its partner.
ITTI played three roles. First, it owned — along with the Vázquez Group — several of the firms that applied for the loans, and it divested itself of them just before or shortly after they received the loans. Second, it was the primary recipient of the funds. Third, it was the entity that paid off the debts, either directly or indirectly.
According to the Prosecutor’s Office, the scheme was circular. The debts were not paid with the earnings of the debtor companies but rather with funds coming from other firms within the same group — primarily ITTI and the payment processor Red Digital — sometimes drawn from new overdrafts extended by the bank itself.
According to the indictment, the bank concealed from the banking regulator that it had exceeded the legal credit limits for related parties. When the Superintendency of Banks pressed the issue, Ueno sold a portfolio worth USD 74.4 million to another affiliated company, Vinanzas S.A., which paid for it with funds that, upon investigation, were ultimately traced back to Ueno Bank itself.
The Prosecutor’s Office estimates that approximately USD 167 million and 343,000 million guaraníes remain outstanding, with little chance of recovery. This puts the money of depositors and public funds held at the bank at risk.
