U.S. network-equipment maker Cisco Systems said Thursday it suspended one of its Latin American executives due to criminal accusations against him regarding the company's ongoing tax evasion case in Brazil.
Cisco also said the removal of Carlos Carnevali, vice president of Latin America, was based on an internal investigation into the company's alleged involvement in a smuggling and tax fraud scheme that may have benefited the company for several years.
The internal inquiry turned up a "failure to comply with Cisco's Business Code of Conduct" under Carnevali's watch, the company said in a statement.
In October, Brazilian police arrested and charged a group of local businessmen, including Carnevali and other employees of Cisco's Brazilian subsidiary, of setting up a scheme to evade import duties and local sales and corporate taxes to benefit the company.
The Cisco case is one of a few recent investigations that seem to show that Brazil is stepping up its fight against the illegal tax schemes that have for decades deprived Latin America's largest nation of billions of dollars in government revenue.
Brazil represents approximately 1 percent of Cisco's overall business.
Brazil's Revenue Service said that Cisco's unpaid taxes, fines and interest could reach 1.5 billion reais ($850 million).