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By | Kelly Fiveash 23rd November 2007 13:03

Cisco fires Brazil chief over tax fraud charges

'Code of conduct' violations

Network kit maker Cisco Systems Inc has suspended a director of the Brazilian arm of its business following formal tax fraud charges involving the alleged evasion of up to R$1.5bn ($845m) in import duties and other taxes.

Carlos Roberto Carnevali, who headed up operations at Cisco's Latin American unit, was charged along with 15 other people.

According to the Financial Times, the majority of that group had links to the firm's main distie in Brazil, Mude Comercio e Servicos.

Cisco said in a statement that it had terminated the director after an internal review in which it concluded that, given the serious nature of the criminal charges, Carnevali could no longer remain at the firm.

It said he had failed "to comply with Cisco's code of business conduct".

The network equipment giant, which pulls in about one per cent of total revenue from its Brazil-based operations, said it was working internally "to better understand the full facts of the situation in Brazil", as well as continuing to cooperate with the authorities.

Just last month Cisco denied any involvement or wrongdoing in the tax fraud scandal following massive police raids at the firm's Brazilian offices.

Judges, who brought the charges against Carnevali and the 15 others, said in a statement: "[This was a] criminal organisation 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."

The charges followed a police investigation, dubbed Operation Persona, in which 40 people were arrested and held in custody last month.

It is alleged that a complex network of companies in Brazil and overseas were used to shift hardware and software via fraudulent means. ®

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