Carlos Carnevali, vice president of Latin America for Cisco (Nasdaq: ), has been suspended following an internal investigation.

Financial Times reported Thursday that Carnevali was fired, but Reuters said in a later report that the executive was suspended. The Associated Press also reported that Carnevali was fired.

Carnevali’s removal is part of Cisco’s reaction to the arrests last month of several people – including Carnevali – in a smuggling and tax fraud case in Brazil. The Brazilian government says the scheme could have led to the avoidance of paying some $850 million in taxes.

In a statement issued on Cisco’s Brazil Web page, the company said Carnevali was removed “due to the nature of the criminal charges against him and also because of internal audit sought by the company, which found a loophole in compliance with the Code of Conduct of Business of Cisco.”

Cisco also said in the statement that the networking giant “continues to work diligently to cooperate with the authorities and, through internal audit, better understand all the facts about the situation in Brazil. Our preliminary review and information brought to our attention by the authorities suggested, strongly, that an officer of Cisco Brazil had plans for their own benefit. This activity was completely separate the interests of Cisco, its standard business practices, ethical principles to training and brought significant damage to the company.”

Cisco also said additional “appropriate corrective and disciplinary measures” could be taken.

“The culture and the integrity of our company demand it.”

The Brazilian judge overseeing the case (called “Operation Persona”) formally opened the criminal proceedings in the case on Thursday, the Financial Times reported.

“Operation Persona identified 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 paper quoted him as saying.

“The beneficiaries of this falsification were the companies Cisco Systems Inc of the US as exporter and Cisco do Brasil Ltda as importer, with the direct involvement of the supplier of Cisco in Brazil, Mude Comércio e Serviços Ltda, and other Brazilian and American companies, real and phantom, that were used as intermediaries to the falsification.”