Channel Partner Connected To Brazilian Police Raid On Cisco Offices

Cisco offices in Sao Paulo and Rio de Janiero were temporarily closed by Brazilian authorities as part of a wider raid Tuesday. A "small number" of employees were detained by authorities, but no formal charges have been brought against them, a Cisco spokesman said Wednesday.

That statement contradicts reports Wednesday that three acting senior executives and one former president of Cisco Brazil are among 40 people arrested by Brazilian police for alleged tax fraud related to the evasion of import duties and taxes.

"I can't talk about that," the spokesman said, when asked about the conflicting reports citing the arrest of Cisco employees.

Local media are reporting that 93 search and seizure warrants were issued by Brazilian authorities as part of a two-year investigation dubbed "Persona."

The Cisco spokesman confirmed that Mude Comercio e Servicos, one of Cisco's Brazilian distribution partners, is one of the companies under investigation.

Cisco gave Mude its Brazilian Best Distributor Award as part of its 2007 Emerging Markets awards earlier this year.

The spokesman said he could not discuss whether other channel partners are also involved in the investigation.

Investigators allege that Cisco's Brazilian unit used companies based in tax havens such as Panama, the Bahamas and the British Virgin Islands to circumvent import taxes.

Erika Nogueira, the federal police official in charge of the probe, is quoted by Reuters as saying, "It's inevitable that this investigation is going to lead us to headquarters."