RESEARCH TRIANGLE PARK – Cisco is caught up in a massive tax evasion investigation in Brazil and as a result the company has temporarily closed offices in Rio de Janeiro and Sao Paulo, according to media reports.

The Associated Press and the BBC said dozens of people were arrested and equipment along with a corporate jet were seized in a series of raids on Tuesday.

A Brazilian federal judge authorized the raids as part of the probe that alleges Cisco gear was sold in a scheme to avoid “duties on products shipped from offshore tax havens,” according to The AP.

Cisco is cooperating with investigators, the company said.

John Noh, a Cisco spokesman, told the BBC: "We are currently in the process of establishing what exactly happened in Brazil, and determining how this investigation pertains to Cisco. We understand that a small number of employees have been detained. No formal charges have been brought against these employees."

Cisco also told the AP that a “small number” of Cisco employees were detained but added that no formal charges have been filed.

A former Cisco executive, who has not been named, in Brazil is among the people being investigated, according to the AP and BBC.

Cisco said it would cooperate with investigators.

Here is Cisco’s full statement as posted on its Web site:

"According to Brazilian authorities, numerous raids were conducted today in Brazil in connection with an alleged scheme to evade payment of taxes. According to official reports, the issue pertains to a group of Brazilian companies, at least one of which is a Cisco reseller in Brazil. As part of this effort, Brazilian authorities visited and temporarily closed Cisco’s offices in Sao Paulo and Rio de Janiero. We understand that a small number of employees have been detained. No formal charges have been brought against these employees.

"Cisco’s core principles include compliance with the laws and regulations of all the countries in which it does business. We are currently in the process of establishing what exactly has happened in Brazil and determining how this investigation pertains to Cisco. We are cooperating fully with the Brazilian authorities.

"Cisco’s Brazilian operation is part of the Latin American region within the Emerging Markets Theater. Emerging Markets Theater sales represent approximately 10% of Cisco’s overall business, and Brazil represents approximately 1% of Cisco’s overall business. Cisco does not have a direct sales operation in Brazil. Rather, we sell our products through multiple 1-Tier partners. Business continues in the region through these partners."

The probe is massive. In all, 40 people were arrested and 93 search warrants were carried out by some 650 agents, the AP added.

The AP noted that the company at the center of the probe was not identified. However, the judge in the case ruled that Cisco benefited from the scheme and therefore he authorized the searches of Cisco offices.

Cisco pointed out that it does not sell products directly in Brazil but through resellers. The firm added that one of its resellers is under investigation. Brazilian federal tax officials also could be involved, the AP added.

The BBC reported that the probe involves $500 million worth of gear was imported over the past five years.