Brazilian police dubbed their crackdown "Operation Persona," which led to raids and temporary arrests of 41 members of an organization that allegedly evaded federal taxes when importing Cisco Systems networking gear.
The gang, as police termed them, allegedly concealed the real importers and exporters of the equipment with the intent of reducing taxes due, the Federal Police told a Brazilian federal judge in a statement released by the Federal Justice Department of Sao Paulo.
Police were seeking the judge's permission to make the arrests and seize property to support their suspicions. Police alleged that the gang could be guilty of crimes of falsifying documents, underpricing goods and creating ghost companies to stimulate trade, using false documents and evading taxes, according to the Federal Justice statement.
Those raids occurred yesterday in three cities, and led to more than 40 arrests, according to several news reports. There could be several more arrests, including some in the U.S., several reports said. In all, the tax avoidance could total more than US$800 million, police said.
Citing unnamed sources, IDG Now! in Brazil, said those under temporary arrest included Cisco Brazil President Pedro Ripper, and Marcos Sena, director of channels for Cisco Brazil.
However, a spokesman for Federal Justice, Gabriela Reis, said that the agency was not releasing the names of the arrested, and would not confirm if others are expected to be arrested, or if any charges have been brought.
Cisco issued a statement that said the raids targeted many companies, including a Cisco reseller in Brazil, which led to a temporary closing of Cisco offices in two cities and temporary arrests of a small group of Cisco employees. Cisco would not name the employees and said it is cooperating in the investigation.
The Inquirer, a U.K.-based news site, cited sources that said Cisco allegedly shipped equipment from tax havens in the Caribbean and Central America to its Brazilian customers at low cost in order to evade Brazilian import duties.
In the Federal Justice statement, police named Cisco Systems as one of the companies that would benefit from the scheme, as well as Cisco to Brazil, an importer, Mude Trade and Services and other U.S. and Brazilian companies.
The statement says the gang was divided into "heads," "managers," and "laborers," designating their roles in the group.