Cisco Systems (Nasdaq: ). published advertisements in major Brazilian newspapers Friday to defend the company against allegations it benefited from a scheme to avoid duties on products shipped from tax havens to Brazil.
"We do not believe Cisco has acted inappropriately," Cisco said in ads placed in four of Sao Paulo’s leading newspapers.
No charges have been filed, but the judge who authorized a raid of Cisco offices said bogus documents showing unreasonably low prices had been used to import electronic and telecommunications products to avoid duties.
The world’s biggest manufacturer of computer network equipment said it believes it should not be involved because Cisco does not import products directly into Brazil, relying on resellers instead.
Cisco also said four of its employees were detained after raids Tuesday at the company’s Sao Paulo and Rio de Janeiro offices, but it declined to name the employees or say what positions they hold.
Brazilian authorities also refused to name those detained, but the judge said one former top Cisco executive for Brazil was among those under investigation.
About 650 police and tax agents arrested dozens of people and searched homes of Brazilians involved in the alleged plot. Authorities also seized $10 million in merchandise, a commercial jet, 18 vehicles and the equivalent of nearly $400,000 in Brazilian and U.S. currency during the raids.
Cisco said it is cooperating with the investigators and is conducting an international investigation "to understand these troubling allegations."
A two-year police investigation focused on at least $500 million in products shipped to Brazilian clients from tax havens like Panama, the Bahamas and the British Virgin islands, police said. Those goods could have generated $833 million in tax revenue for the Brazilian government, authorities say.
Cisco, headquartered in San Jose, California, started operations in Brazil in 1994 and has offices in Sao Paulo, Rio de Janeiro and the capital, Brasilia.
Cisco also employs more than 2,000 people at its campus in Research Triangle Park, N.C.
In its advertisements, Cisco said it "is proud of its contribution to the Brazilian economy through its support of critical internet networks, and of our active participation in the drive toward meaningful digital inclusion in Brazil."