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Cisco Brazil Scandal: Official Statement and Relevant Facts

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In the time that elapsed since we first posted about Cisco Systems’ (CSCO) run-in with the Brazilian tax authorities, many of you have sent us translations from local media. I wanted to take a moment to thank you for your efforts. (Hey, maybe time to visit you all :-) )

Cisco issued a statement acknowledging that its offices were raided and said the problem is local in nature. “We understand that a small number of employees have been detained. No formal charges have been brought against these employees,” the company said. Brazil represents approximately 1 percent of Cisco’s overall business; it doesn’t have a direct sales operation in the country but sells its products there via partners.

Julio does a good job of aggregating the local media coverage, presenting us with these relevant facts:

  • 93 search and seizure warrants were served
  • 40 people were arrested, including the current president of Cisco Brazil, Pedro RipperPedro Rípero, ex-President Carlos Roberto Carnevali, and two other company executives.
  • Brazilian authorities are seeking help from the U.S. in arresting five executives who allegedly masterminded the scheme.
  • The scheme would have resulted in tax evasion of $825 million over five years.
  • The investigation (dubbed “Operation Persona”) has been going on for about two years now.

For further reading, click here.

5 Responses to “Cisco Brazil Scandal: Official Statement and Relevant Facts”

  1. There seems to be a major damage control effort by Cisco underway. Two days after the raid, the repercussion in the major newspapers and sites in the US is almost none. Almost nothing in the NY Times, Washington Post, CNN… As Zoli commented above, this was a major raid after a long investigation, and involves a sophisticated scheme to evade taxes. To see what I mean, just google the name “Pedro Ripper” – you’ll find links to Cisco sites (bio and stuff). Click on any of them, or search on, and you’ll find that every reference to Ripper is gone. Reminds me of the movie “Eraser”…
    Meanwhile, the company says that they’re “trying to establish what exactly has happened in Brazil”, and that they have no direct sales operation in Brazil. Well, I believe that’s exactly the point: they were using other companies to do the dirty work…
    I’m appalled at how much power such a company has over the media. Free press? sure…