Cisco Brazil Chief Suspended for Tax Evasion

Cisco Systems had to pull out chief Carlos Roberto Carnevali after he was charged with tax evasion of up to $845 million in import duties and other taxes. The evasion had been the subject of an internal investigation and revealed that Carnevali and 15 other employees of Cisco Systems worked with distributor Mude Comercio e Servicos to elaborate a complex tax-evading scheme.

Cisco officials stated that they had terminated the chairman because, given the nature of these accusations, Roberto Carnevali could not represent the company, as he "failed to comply with Cisco's code of business conduct". The company started the internal affair "to better understand the full facts of the situation in Brazil", according to the same Cisco spokesperson.

The scandal erupted last month, when police raided Cisco's Brazilian offices. Cisco denied the involvement of the company in Cavali's criminal activities. Cavali was part of a criminal organization that used to operate a large scale business that used a complex network of companies in Brazil and overseas to illegally shift hardware and software across the country.

During the following police investigation, the authorities arrested over 40 members of the network and confiscated an unrevealed amount of software and hardware equipments. The police and tax authorities said that they believe that Cavali and his organization had imported $845 million of telecommunications and network equipment over the past five years with disrespect to the tax duties over these goods.

"Operation Persona identified a criminal organization that imported electronic and telecommunications products in a falsified manner, with the aim of concealing the true importers and exporters and obtaining reductions in the taxes owed in relation to these imports", stated Luiz Renato Pacheco Chaves de Oliveira, the judge who charged Cavali and his group with tax evasion.

The network hardware manufacturer's business in Brazil brings about one percent of the total income and ensured the Brazilian authorities of their full cooperation during the investigations.

MORE RELATED ARTICLES: AMD to Sacrifice CEO Hector Ruiz Cisco Systems Is Optimistic Cisco May Step Into The WiMax Arena CIA Group Closed Down by Cisco Cisco Prepares a New 802.11n Chip Cisco Adds Virtual Switching Features to Blow Away Network Traffic