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Cisco Offices Raided, Execs Arrested In Brazil

kdawson posted more than 6 years ago | from the where's-my-white-hat dept.

Businesses 537

Many readers are writing in about the raids and arrests in Brazil's Cisco operation. At least 40 people were arrested earlier today, and Brazilian authorities asked the US to issue arrest warrants for five more suspects in this country. The allegation is that Cisco brought at least $500M of equipment into Brazil without properly paying import duties, and now owes over $826M in taxes, fines, and interest.

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Would have gotten away with it too if it weren't f (4, Informative)

cez (539085) | more than 6 years ago | (#21004741)

those meddling kids!*(&$!#


Basically... *Shwing* emerging markets.


"Damn, imagine if we weren't direct shipping to clients and had to pay taxes on the real value of all this shit!"


How accounting didn't realize this, or who's on top of the ladder of people in the know the article doesn't begin to speculate...


Corporate World at its finest, do it until caught, then pay a fine that doesn't affect the bottom line.


FTFA:


In raids that began Tuesday, 650 police and tax agents executed 93 search warrants and arrested 40 people involved in the alleged scheme set up by Brazilian businessmen to benefit the U.S. company, the AP reported, citing a statement from Brazil's federal police.


Goods were shipped from tax havens like Panama, the Bahamas and the British Virgin islands to Brazilian clients to avoid local taxes, and the value of the products was underestimated, the AP report said.


The investigation by Brazilian authorities began two years ago, according to the AP report.


PS: This is the only text at all on Page 2.

Page 2 of 2

Cisco started operations in Brazil in 1994 and has sites in Sao Paulo, Rio de Janeiro and Brasilia.

Re:Would have gotten away with it too if it weren' (3, Funny)

v1 (525388) | more than 6 years ago | (#21004785)

those meddling kids!*(&$!#

and their dog. musn't forget the dog

Re:Would have gotten away with it too if it weren' (2, Funny)

Anonymous Coward | more than 6 years ago | (#21005281)

Wrats Wroight!

Re:Would have gotten away with it too if it weren' (1, Troll)

TheMeuge (645043) | more than 6 years ago | (#21004799)

Translation:

Cisco officials were pwned by Brazilian authorities for not bribing enough of the right people with the right amount of money.

Re:Would have gotten away with it too if it weren' (1, Interesting)

Anonymous Coward | more than 6 years ago | (#21004843)

Probably. When our company ships appliances into Brazil, we never get them back. It's actually more expensive to ship them back out of the country than what they are worth, so we just have a warehouse filling up with half-broken appliances somewhere in Brazil... (posting AC for obvious reasons).

Re:Would have gotten away with it too if it weren' (0)

Anonymous Coward | more than 6 years ago | (#21005053)

Exactly ... if they had taken a lesson from their big cousins in the US oil industry, they'd have known that it's no use to try cheap tricks like that. You're better off buying off the entire government and you can even make some extra money by telling your pawns (no .. that's actually the way it's written, not a typo;) to start a war or anything that might open new markets :P

Re:Would have gotten away with it too if it weren' (0)

Anonymous Coward | more than 6 years ago | (#21005155)

If they could afford the US government for so long without a hit to their bottom line, I am certain they can handle several other continents. Not that the quality of bribed officials is any less, jus tthe cost of living has always been so much higher in the US.

Re:Would have gotten away with it too if it weren' (0)

Anonymous Coward | more than 6 years ago | (#21005177)

I worked with a Brazilian who's dad had a factory over there. He said nobody pays any tax of any form; that you have to be stupid to do so. Its the national sport.
He claimed that you had to keep papers around for only 8 years, after that you where home free. In the small chance you get cough once in a while (his father did not in over 35 years) you deal out of court for small amounts compared to all those years you did not pay anything.

Like my speeding tickets! Really just a few cents for each time I exceeded the limit!

When I was in Los Angeles, some lawyer had an add on Radio: "IRS Problems? We always settle for dime on the dollar" basically saying, don't pay, if you get in trouble you will pay 10% of what the other stupid people pay in tax.

Comments from Brazilian slashdoters? I always wondered if this was for real.

About time (5, Funny)

Anonymous Coward | more than 6 years ago | (#21004763)

I can't believe they have been running an enterprise without any drive redundancy.

As far as the arresting execs, I would check permissions and test memory, and try rerunning them.

Re:About time (1)

Anonymous Coward | more than 6 years ago | (#21005203)

I'd mod you up if I could, but I can't. so I won't.

In related news... (5, Funny)

NF6X (725054) | more than 6 years ago | (#21004769)

U.S. officials were asked to reply to the arrest warrant requests by telephone, as all email service in Brazil appears to be out of order.

Re:In related news... (5, Funny)

Brian Gordon (987471) | more than 6 years ago | (#21004815)

Brazil law enforcement frustrated by the inoperability of the nation-wide VoIP network. US officials will recieve notice by pony express in approximately 7 months.

Worse than ignorance, it's iggerunt. (2, Informative)

Futurepower(R) (558542) | more than 6 years ago | (#21005267)

About Brazil: Someone ought to stop the iggerunt comments with some facts:

1) Do you have billboards in your city? Sao Paulo, Brazil, one of the biggest cities in the world does not [flickr.com] . Sao Paulo is more advanced than most cities in that way.

2) Officials from New York City visited Curitiba, Brazil to learn how to run a city [nytimes.com] .

3) Brazilians seem much happier than people in the U.S., even though people in the U.S., on average, have more money.

4) It is not correct to call Brazil part of "Latin America". Brazilians are part of a very different culture than the Spanish-speaking countries. (Brazilians speak Portuguese.)

5) I know this will seem strange to men in the U.S., but women in Brazil generally like men and generally treat them well.

6) At least 50% of the men from the U.S. I have known who have visited Brazil have very quickly found a woman they wanted to marry. Don't do that. Take your time and do the work. It takes a long time and a lot of effort to build a marriage-quality relationship, even with a very nice woman.

7) Brazilians like jokes. Often a Brazilian takes advantage of, or begins to laugh about, a humorous situation in less than 500 milliseconds.

8) The Brazilian government is far from perfect, but is much less corrupt than the U.S. government. How many Iraqi civilians has the president of each country killed? George W. Bush: 1,000,000. Lula: 0. How many countries has each country invaded or bombed for oil or weapons or other profits [krysstal.com] since the end of the 2nd World War: United States: 24. Brazil: 0.

Re:Worse than ignorance, it's iggerunt. (1)

Starayo (989319) | more than 6 years ago | (#21005447)

Brazilians speak their own local variant of Portuguese. I am half Portuguese myself and though I don't yet know enough of the language to tell, my father and his family are often very annoyed when they find something advertised as being in Portuguese as being in "Brazilian".

Re:Worse than ignorance, it's iggerunt. (2, Funny)

NF6X (725054) | more than 6 years ago | (#21005453)

Brazilians like jokes. Often a Brazilian takes advantage of, or begins to laugh about, a humorous situation in less than 500 milliseconds.

I began laughing about the irony of this response to my joke in less than 499 milliseconds.

Re:Worse than ignorance, it's iggerunt. (2, Interesting)

vbraga (228124) | more than 6 years ago | (#21005455)

8) The Brazilian government is far from perfect, but is much less corrupt than the U.S. government. How many Iraqi civilians has the president of each country killed? George W. Bush: 1,000,000. Lula: 0. How many countries has each country invaded or bombed for oil or weapons or other profits [krysstal.com] since the end of the 2nd World War: United States: 24. Brazil: 0.
Just to warn you, reality is calling your at the door.

I'm brazilian , and IT is a overreaction from Federal Police, as most of it other operations. It's good for them, they get media time and well, are the most trusted institution in the country [citation needed - don't have the reference now =D].

So, take our noted good humour, and take it lightly. Don't bash the US, it's just ridiculous. It's a country with problems but Brazil has a nice share of problems too. And should learn many things from US. Being more business friendly is really one of them. People evaded taxes and should be punished. But don't make it a show, with almost live television coverage. That's not the right way to run a country.

Re:In related news... (0, Troll)

megaditto (982598) | more than 6 years ago | (#21004819)

$826M in taxes over $500M worth of high-tech imports?
Those cavemen should be kissing Cisco's ass for providing them modern infrastructure; instead they throw them in jail.
No wonder that Latin America is the shithole it is.
Compare that to China or US where the innovators get tax wavers, research grants, and free land, and you start to understand who will be the World leaders.

Re:In related news... (1)

Trogre (513942) | more than 6 years ago | (#21004953)

Hmm, I find your ideas interesting.

AYAK?

Re:In related news... (-1, Troll)

megaditto (982598) | more than 6 years ago | (#21005189)

Am I a Klansman? No, not really. (sorry)

I am even pro-'open borders' so that the good hardworking folks in Latin America can get the hell out of their hellhole dictatorships run by corrupt shitheads, and have a fair chance over here.

Re:In related news... (2, Insightful)

kithrup (778358) | more than 6 years ago | (#21004963)

$826 million in taxes, fines, and interest. Tax evasion (or avoision, as Kent Brockman likes to say) results in fines in addition to the taxes that are owed. And then every day they don't pay the taxes and fines, they get interest added. And that compounds.

The United States has done similar things. For larger amounts. Usually, it gets settled out of court for a fine; I don't know Brazilian courts, but I still suspect that'll happen here.

Re:In related news... (1)

Drysh (868378) | more than 6 years ago | (#21005389)

The difference is that they shipped their products with false prices. That's fraud (=jail), not tax evasion (=fine).

Re:In related news... (1)

Propaganda13 (312548) | more than 6 years ago | (#21004987)

$826M in taxes over $500M worth of high-tech imports?
A comma in a list does not end the sentence.

The allegation is that Cisco brought at least $500M of equipment into Brazil without properly paying import duties, and now owes over $826M in taxes, fines, and interest.
 

Re:In related news... (0, Offtopic)

hjf (703092) | more than 6 years ago | (#21005003)

I usually don't feed the trolls but,

fuck you, motherfucking ignorant yankee. you don't know shit about anything. you think Brazil's telecom infrastructure is worth just 500M? You need to read a lot more I guess, starting here: http://en.wikipedia.org/wiki/Itaipu [wikipedia.org] and then you'll understand the magnitude of Brazil's economy.

and again, fuck you.

Re:In related news... (1)

networkBoy (774728) | more than 6 years ago | (#21005103)

Funny, now all I can wonder is are all brazillians as hot headed as you?
FWIF you may have gotten a better response by pointing out that had CISCO asked they could have gotten a break, but instead they were sneaky about it.

That, and you lost. The point of a troll like that is to piss you off, you fed him well.
-nB

Re:In related news... (1)

hjf (703092) | more than 6 years ago | (#21005275)

I'm not brazilian :)

Re:In related news... (1)

superwiz (655733) | more than 6 years ago | (#21005109)

Hmm... I read the Wikipedia link you provided. Thank you. Apparently it was jointly built by an American and Italian companies. How would you like your crow served, sir? Boiled, I guess?

http://en.wikipedia.org/wiki/To_eat_boiled_crow [wikipedia.org]

Re:In related news... (1)

megaditto (982598) | more than 6 years ago | (#21005175)

Or check out another "largest" built by the Russkies in 1932: http://en.wikipedia.org/wiki/Dneproges [wikipedia.org]

But I guess congrats to Brazil for replicating with Italian help what the commies did half a century before them...

Re:In related news... (1)

hjf (703092) | more than 6 years ago | (#21005245)

Ah, but you bit. I had read the article a couple of days ago, and put it specifically for that part. But you didn't notice: The GGP was talking about letting foreign companies do their business, and that's exactly what those companies did. An american company made it (now a subsidiary of singapore whatever). That's something productive. Not like Cisco did.

Cisco, instead, is importing products and not even paying the taxes. What's the point then? Brazil doesn't win anything. In fact, you could say they lose, because Cisco won't be moving their factories (chinese) and design centers (american and, afaik, israeli) to Brazil. They're there only to sell. OK, fine. But you have to pay taxes, or face the consequences.

Re:In related news... (1)

superwiz (655733) | more than 6 years ago | (#21005287)

I think you are missing the point. Americans provided expertise both in Cisco and the dam case. Expertise that Brazil could not muster on its own. The fact that they didn't much for you is irrelevant. They don't owe you a damn thing. If you don't want want them to do business, stay in the stone age and don't let them.

Re:In related news... (1)

the_fat_kid (1094399) | more than 6 years ago | (#21005117)

I feel that you are holding back. If you internalize these things they will turn into a cancer or an ulcer.
So, again I say, "tell us how you realy feel"

and you are, of course, right.

Re:In related news... (1)

vrrrtk (1132459) | more than 6 years ago | (#21005215)

Those cavemen should be kissing Cisco's ass for providing them modern infrastructure; instead they throw them in jail.
Do you really kiss the ass of people who rob you ?

Compare that to China or US where the innovators get tax wavers, research grants, and free land, and you start to understand who will be the World leaders
Ok then, so.. China has the right model, I don't think Cisco would like to see an Brazilian Huawei...

No wonder that Latin America is the shithole it is.
Why ? Because it is enforcing laws ?

Re:In related news... (0)

Anonymous Coward | more than 6 years ago | (#21005315)

Actually I heard a story about a guy that was given shelter by a family with cleptomania (both siblings had it, probably genetic). The way he dealt with it was by keeping a bag of candy in his room; they would steal and hide some each day, and when the bag got almost empty, he would go raid their stash, and take all of his candy back. The next day it would start disappearing again... They never spoke of it of course, and lived happily ever after.

something is rotten in brazil (-1, Troll)

Anonymous Coward | more than 6 years ago | (#21004795)

It was a beautiful morning. Warm, clear, and quiet. Just about time to
check up on the animals again. I had fed them earlier, and tested them.
Quite a few of the stallions liked to be played with. I took a cup of
coffee, and made my way on down to the barn. There was somebody
standing by the corral, petting a black horse. As I got closer, I
recognized him. It was the same kid I had given a "lesson" in manners
to yesterday. But he was different. Clean clothes, being nice to the
animal, hmmm... "Good Morning," I said, putting my cup on a fencepost.
He grinned, shyly. "You owe me a favor." "Oh?" "Yeah," he turned, and I
could see the excitement in his eyes. "You said you were going to take
care of this..."

He opened his fly, and let seven inches of cut man meat slide out. I
stroked it, and he groaned. "A promise is a promise." I knelt down, and
licked on the tip. He moaned, running his hands over my shoulders. I
nibbled on the sensitive end, scraping my teeth gently along the
sensitive underside. When was fully hard, I stopped, and got up. "Come
on, I'll show you how to screw horses."

There was a pony in the barn, a nice Welsh Stallion, who earlier had
showed interest at both my hand on his balls, and a finger poked under
his tail. Maybe, I wasn't the only one who liked equines... I took him
out into the back corral, and tied his halter to the fence. "By the
way, I'm Rick, and nobody has ever done that to me before... I kinda
liked it." "From the way you were sucking on that stallion, I would say
it was more than `Kinda'." He grinned at that. "My name is Jack, as in
masturbate." I grabbed another crate, and the vaseline, and we went out
into the corral. He shed his clothes, and I put them in a neat pile,
off to one side. "O.K. The first rule, is let the animal know what you
are doing, at all times. Pet his nose, then rub his sides, and either
run your hand down his belly, or slide it across his rump and under his
tail. This way, he knows you are friendly, and you know if the animal
is interested."

Rick rubbed the animal, running one hand across it's back, and then
under it's tail. The pony snorted, and lifted his tail in a fountain
of horse hair. "Now, lubricate him up." Rick scooped out two fingers
worth of the slick jelly, and played with the stallions ass hole. Both
dig its diappeared into the animal's anus. "He likes it!" I smiled.
"Now, grease your cock up, and rub his ass with it." Rick smeared more
of the slippery lube on his dick, and handed it to me. Then, he slid
the seeping cock head up and down across the pony's anus. "When you
can't stand it anymore, screw him." He pressed his greasy dick against
the button of flesh. It puckered inward for a moment, then opened up,
engulfing the young man's penis, almost hungrily. "Wow! He's tight!!"
"If you are alone, and the pony is small enough, you can lean over him
and play with his cock, while you bugger him. They like that."

I watched the kid slide in until his crotch hairs pressed the animal's
butt. "You can rub his back, and his sides while you screw him, but do
not grab his legs. There is a web of flesh where his hind legs meet his
body, and they are very sensitive there. Grab him there, and he is
likely to kick you. Enjoy yourself..." I undid the lead rope, freeing
the animal's head, so it could move. And move it did! First the animal
snorted, then he sniffed me, then crained his neck back, and sniffed at
the kid, who was fucking him slowly. He shook his head, making his mane
fly, and grunting, stretched his neck out. Then his ears went up, and
he started nodding his head in time to the human's stroking.

I went out, and retrieved my coffee. Then I sat on the crate, and
watched while Rick buggered the pony. He was hunched over the animal,
one hand petting the animal's heaving sides, while the other wrapped
tightly around the black pony cock slowly stroked back and forth. It
was like a slow motion sculpture. Rick's hips moved back, and his cock
slid out a few inches. He pulled up on the pony's dick, causing the
animal to shiver, and pump it's own haunches forward. Then the human
pressed down, and his penis again disappeared into the pony's ass,
while the animal shoved back, causing the thirteen inches of horse meat
to slither through grasping fingers. There was a muffled slap, as flesh
met flesh. The human groaned, the pony grunted, and the whole processs
started again.

I swallowed the last gulp of coffee, and went over to the pair. The
horse looked at me, still bobbing his head. Lust shone in his eyes, and
I knew his orgasm wan't far away. Let's help it along... Rick
straightened up, and grabbing the pony's hips, fucked him hard and
fast. I sat under the animal's belly, and playing with his swelling
balls, sucked in the fat cockhead. And none too soon! The testicles in
my hands jumped in their sacks, as the tip of the pony's penis
expanded, and spat a wad of cum into my mouth. It splattered stickly
across my tonsils. The stallion wheezed, his cock throbbing.

Above me, Rick gave out a yelp, and growled. I chuckled, swallowing
another creamy bullet. The pony's anus squeezed on his cock, every time
the animal ejaculated. I gnawed in the rubbery flesh, milking his
balls. Still more horse cum poured out. I let my mouth fill for a
moment, and took a breath, the sweet scent of horse sent my senses
reeling. Sliding my tongue under the tip, I opened my throat, and
created a vacuum. Warm horse spunk poured down into my stomach,
shoveled in by a thick spatulalike cockhead, which pressed against
the back of my mouth and continued squirting. The flesh tasted sweet
after the tangy ejaculate.

When the gusher slowed to a trickle, I moved my head back, and took a
few breaths. Then, clamping my hands around the thick trunk, I milked
the last of the ponycum out. The tired animal nuzzled my back, his
cock disappearing back into it's leathery sheath. Rick lay on top of
the wide back, panting. I got up, and rubbed the stallion's head. I
grinned at the lad. "Well, how do you like horses now?" He shook his
head."I'd never have believed in a million years... I am going to take
a dip." While he jumped into one of the ponds, I rubbed down the pony,
and put everything away.

That started three full days of sexfilled bliss. Sometimes Rick would
fuck them, and sometimes I would. I taught him how to hold his breath,
so he could "deep-throat" an animal. I also showed him how much fun
Mares were. On Friday, my brother returned, and I went back to work.
Just about a year later, I got a call from Rick. It seems he had
inherited a ranch, and needed somebody to help him run the place. When
I got there, I found out he also had pack mules, and donkeys. So, we
started a working "Dude Ranch", with special trails, and week long
excursions. And, of course, at the end of the day, we showed our
animals how much we appreciated them carrying us and our gear. And to
think it all started with a chance meeting, and under not the best of
circumstances, either. Life was funny. I bent down, and kissed my
mammoth jack donkey between his long ears. He snorted, and looked at me
with one brown eye.

I waited for the rest of the "tenderfoot" 's to arrive at the camp
site. More pupils to show how much fun a donkey was. I got down off my
animal and stood, rubbing his cocksheath, while he nuzzled my crotch.
I grinned, and rubbed his nose with my other hand. "You are going to
have to wait a while, Ulyssies." Yes, life was strange indeed!

This belongs in the ... (2, Funny)

digitalhallucination (313314) | more than 6 years ago | (#21004801)

your-nafta-fu-is-weak dept.

Also in the your-nafta-fu-is-no-good-down-here dept.

brazil is insane (3, Insightful)

Lord Ender (156273) | more than 6 years ago | (#21004817)

Sending them a tax bill seems a bit more sensible than arresting every janitor and secretary in the office. Is Brazil trying to frighten away foreign investment?

Re:brazil is insane (4, Insightful)

ObsessiveMathsFreak (773371) | more than 6 years ago | (#21004861)

Is Brazil trying to frighten away foreign investment?
Hear, hear! I mean Corporate Executives being arrested! Some of these men have played gold with Very Important People?

Who do these Brazilians think they are anyway? Some kind of sovereign nation?

Re:brazil is insane (1)

pembo13 (770295) | more than 6 years ago | (#21004863)

Countries aren't suppose to bow to businesses.

Re:brazil is insane (1)

Jarjarthejedi (996957) | more than 6 years ago | (#21005153)

Countries aren't supposed to treat businesses like criminals either, if they did this to an individual people would be up in arms, why should it be right just because they did it to a corporation? I mean, it's not like Cisco's going to run away, if they got the bill they'd pretty much have to pay up.

Re:brazil is insane (1)

MightyMartian (840721) | more than 6 years ago | (#21005233)

Countries aren't supposed to treat businesses like criminals either...


If they are committing criminal acts they are.

Just how long will Conrad Black spend in jail again?

Re:brazil is insane (1)

pembo13 (770295) | more than 6 years ago | (#21005429)

Countries aren't supposed to treat businesses like criminals either, if they did this to an individual people would be up in arms, why should it be right just because they did it to a corporation? I mean, it's not like Cisco's going to run away, if they got the bill they'd pretty much have to pay up.
What is said country supposed to do when said company is committing illegal acts?

Re:brazil is insane (1)

DavidM01 (1123199) | more than 6 years ago | (#21005289)

That is laughable considering that governments could only exist without business through a police state. Governments have killed millions and by comparison free enterprise has killed...very few. I think Cisco should arrange for release of employees, pull up their tents and let the Brazilians make their own routers. Of course they should pay tariffs but throwing everyone in jail is something only Stalin would smile at.

Re:brazil is insane (1)

Nimey (114278) | more than 6 years ago | (#21005363)

...and then 3Com or whomever will come in and take all of Cisco's Brazil business. And they'll be careful to keep their noses clean.

Live by the buck, die by the buck.

Re:brazil is insane (1)

twistedcubic (577194) | more than 6 years ago | (#21004865)


Is Brazil trying to frighten away foreign investment?

What the hell is the point of investments where the gov't is cheated out of hundreds of millions of dollars? Wouldn't it be kinda stupid for a gov't to encourage this? Or maybe you mean the Halliburton kind of "investment". You must be drunk with the corporate master koolaid to even assume that this bust isn't at all legit.

Re:brazil is insane (2)

shmackie (1049632) | more than 6 years ago | (#21004947)

I think the point the GP is trying to make, is that the Brazilian government is overreacting in a huge way, and this will drive away possible investment. Companies are expecting to pay taxes etc, but arresting a a large portion of their workforce, for what could be an oversight, is a very silly move.

Re:brazil is insane (1)

shmackie (1049632) | more than 6 years ago | (#21005025)

Ok, just RTFA, not an oversight. But it's still heavy handed.

Re:brazil is insane (1)

Dunbal (464142) | more than 6 years ago | (#21005085)

and this will drive away possible investment

In one of the fastest growing economies in the world? Dream on.

Drive Away Investment? (4, Insightful)

Alaren (682568) | more than 6 years ago | (#21005137)

The way totalitarianism is keeping China locked in poverty, with little hope of economic growth?

Also, RTFA--it's not an "oversight" when you ship through multiple countries in such a way that just happens to evade the tax man.

Personally, I'm tired of seeing business criminals take their 6 months of probation but get to keep their ill-gotten gains--so I'd rather see fines than jail time for these guys. But this is certainly one way to tell foreign investors: when you do business in Brazil, you pay taxes to Brazil. Now if only the U.S. could convince some of its own off-shored corporations of something similar...

Re:brazil is insane (2, Informative)

1u3hr (530656) | more than 6 years ago | (#21005165)

arresting a a large portion of their workforce, for what could be an oversight, is a very silly move.

FTFA: "Goods were shipped from tax havens like Panama, the Bahamas and the British Virgin islands to Brazilian clients to avoid local taxes, and the value of the products was underestimated."

Yeah, a mistake anyone could make. Who hasn't accidentally shipped their goods via the BVI?

Re:brazil is insane (1)

Brandybuck (704397) | more than 6 years ago | (#21005015)

Except that Cisco did nothing immoral in this. While Cisco may have been in technical violation of a law, that is not the same as being immoral. If this was their equipment, then why should they not be able to use it in Brazil? If this was their company equipment, to be used by the company, never to be resold in Brazil, then Cisco has cheated nobody.

Re:brazil is insane (1)

Dunbal (464142) | more than 6 years ago | (#21005067)

technical violation of a law

repeat it after me

technical violation of a law
technical violation of a law
technical violation of a law
technical violation of a law

What does "moral" have to do with it?

Re:brazil is insane (1)

hjf (703092) | more than 6 years ago | (#21005095)

Oh, so you know Brazil Import/Export laws now, do you? No you don't. Corporate offices are not tax-free zones. And containers are not diplomatic bags. The moment that equipment crossed the customs line, it was fully under Brazil's regulations and laws, and if that means they had to pay taxes for them, period.

Re:brazil is insane (1)

1u3hr (530656) | more than 6 years ago | (#21005211)

If this was their equipment, then why should they not be able to use it in Brazil?

Cisco is not an ISP. They SELL equipment. Or how were they going to use 500 million dollars worth of gear in their office? And in any case, if you import goods to just about any country, you have to pay tax, regardless whether you're going to use it yourself or sell it. Try bringing a few expensive bottles of spirits or across any border to see how this works in microcosm.

Re:brazil is insane (1)

ChrisMaple (607946) | more than 6 years ago | (#21004939)

RTFA. They were arresting executives, not the peons. Brazil's claim is massive fraud to evade taxes. That said, the ratio of police to those arrested was about 10 to 1, which suggests Brazil is acting in a very heavy-handed and inappropriate manner.

Re:brazil is insane (1)

NMerriam (15122) | more than 6 years ago | (#21004941)

Is Brazil trying to frighten away foreign investment?


Is Brazil trying to frighten tax evaders? Yes, yes they are. You can bet your ass that this will be a lot more effective at getting executives to comply with the law than some bill+interest would be.

Re:brazil is insane (1)

Guppy06 (410832) | more than 6 years ago | (#21005101)

"Sending them a tax bill seems a bit more sensible than arresting every janitor and secretary in the office."

Let's see... sending a bill to foreign executives in a foreign company, holders of foreign passports... what flight risk?

The whole point of arresting someone is to make sure they show up to stand trial and/or pay their fines. Whether or not raiding their offices like this was truly necessary will be determined by whether the arrest requests made to the home nation are honored.

Re:brazil is insane (1)

kindbud (90044) | more than 6 years ago | (#21005285)

Way to not read the article. Especially those of you who modded the parent Insightful. The charge is that there was a organized criminal ring to avoid import taxes, involving shipment from tax havens and the involvement of several Brazilian nationals. If you think someone is engaged in a multi-million dollar racketeering operation, you don't send them a tax bill, you call in the SWAT team, just like we do in America.

Re:brazil is insane (1)

Reverend528 (585549) | more than 6 years ago | (#21005355)

Cisco should be glad this didn't happen in the US. They would have been tasered.

Re:brazil is insane (1)

grasshoppa (657393) | more than 6 years ago | (#21005379)

Cisco should be glad this didn't happen in the US. They would have been tasered.

Only if they were into the kinky shit. Let's face it, our "Elected Officials" line up to give blowjobs and other sexual favors to corporate interests. I'm not even sure they know why they do it anymore.

In other news (0, Troll)

Trogre (513942) | more than 6 years ago | (#21004839)

Cisco closes Brazilian plant, hundreds of jobs lost.

Re:In other news (1)

keeboo (724305) | more than 6 years ago | (#21005027)

Cisco closes Brazilian plant, hundreds of jobs lost.

Hundreds? I find it hard to believe.
They basically import and resell those equipments, I don't think that even the adhesive tape was glued to the box by a brazilian.

Re:In other news (1)

Nick_taken (1090721) | more than 6 years ago | (#21005069)

In further news: Cisco fine money used to generate thousands of jobs

Re:In other news (1)

Guppy06 (410832) | more than 6 years ago | (#21005119)

Serves them right for messing with United Fruit!

Re:In other news (1)

innerweb (721995) | more than 6 years ago | (#21005217)

I wonder how Brazil's Linux initiative is coming along? Are they not worried about ticking Cisco off? Is this part of a larger move towards real independence by a number of countries (independence from the US's draconian IP laws)? Anyone with real insight inside Brazil know any of these things (or ,since this is slashdot, speculation)? I have not kept track, so I do not know what is going on with that.

InnerWeb

Re:In other news (2, Insightful)

1u3hr (530656) | more than 6 years ago | (#21005237)

Huawei expands operations in Brazil, hundreds of jobs created. (Well, not hundreds, but probably as many as Cisco had.)

Re:In other news (1)

AlexBirch (1137019) | more than 6 years ago | (#21005247)

Cisco closes Brazilian plant, hundreds of jobs lost.

The job losses won't be as severe as the sentence of maintaining the digital third world status.

The real story is that Brazil has the ridiculous import taxes. I love Brazil and want to see it become "The Country of the Future." However, until Brazil invests in technology and eliminates the 40% impost tax. They better just plan on being the land of samba, coffee and beaches.

My wealthy Brazilian friends come to the USA to buy their electronics

~~~~
Vote Ron Knittle [lifesbirch.org] for President

Cisco's peons as hostages (0, Flamebait)

Secrity (742221) | more than 6 years ago | (#21004871)

I find it interesting that they are holding Cisco's peons as hostages for Cisco corporate misdeeds.

Re:Cisco's peons as hostages (0)

Anonymous Coward | more than 6 years ago | (#21005065)

Cisco peon's? So if they're not peon's then what were they orignally? They must be innocent bystanders on the way to the local Favela fruit market or something? I have no cluepon on this one and I'm definitely sure(not to start a flamer)that you don't either in this case. If you work for "said" company even as janitor and it's accused of serious crimes; then people will look at you funny until you either show or tell them the about the mop and bucket.

Yeah. Good luck... (1)

msauve (701917) | more than 6 years ago | (#21005089)

extraditing corporate execs from the US, even though the extradition treaty [oas.org] specifically covers the described offense (see Article II, Section 29).

Re:Cisco's peons as hostages (3, Informative)

krotkruton (967718) | more than 6 years ago | (#21005387)

The title of the actual article (emphasis mine):

Cisco offices raided, executives arrested in Brazil: reports

The first sentence in the article (emphasis, again, mine):

Senior executives of Cisco were reportedly arrested in Brazil this week in a tax fraud investigation of the company.

Now, which peons were you referring to? 40 arrests were made, and there is nothing in the article that says anything about "peons" as so many people keep saying.

Let me guess (0, Troll)

WindBourne (631190) | more than 6 years ago | (#21004929)

There is a NEW company in brazil that just recently started building routers and switches. Most likely, it is using OSS as its base (smart), so is now paying politicians to damage Cisco (stupid).

Re:Let me guess (1)

keeboo (724305) | more than 6 years ago | (#21005115)

Most likely, it is using OSS as its base (smart), so is now paying politicians to damage Cisco (stupid).

It's more probable that Dalai Lama is involved than OSS policy having anything to do with that.

I'm a brazilian public servant and, believe me, all that OSS talk over the years is just that -- talk.
There are OSS projects going on, yes, but those have nothing to do with federal incentives of any kind, because there are none.

A whole new meaning to network tunneling (0)

Anonymous Coward | more than 6 years ago | (#21004933)

I guess they know the best way for "network tunneling"

Bunch of... (2, Funny)

mikek2 (562884) | more than 6 years ago | (#21004949)

[Randal]
Bunch of fucking savages in this town.
[/Randal]

New tag: hidethebooks (0, Offtopic)

kcbanner (929309) | more than 6 years ago | (#21004971)

You know you want to tag it...

This just in: Brazillian Gov better than US Gov... (-1, Troll)

Jackie_Chan_Fan (730745) | more than 6 years ago | (#21004983)

Wow.. a government that actually polices the evil corporations rather than bends over backwards for them. I'm sure we'll never ever hear of such things in America.

uh... (1)

Whatanut (203397) | more than 6 years ago | (#21005009)

"Come on... pay us! We have your... janitor... Give it some time. You'll see what all the stink is about."

Pretty hefty tax rate... (1, Insightful)

Anonymous Coward | more than 6 years ago | (#21005041)

$500 million worth of telecommunications and network equipment, $826.4 million in taxes?

That's a 165% tax rate!

Re:Pretty hefty tax rate... (1)

Dunbal (464142) | more than 6 years ago | (#21005051)

That's a 165% tax rate!

      Welcome to Brazil.

Re:Pretty hefty tax rate... (1)

wikinerd (809585) | more than 6 years ago | (#21005303)

Here in Greece (EU) 100% tax rate is quite common... I wanted batteries for my Flybook [flybook.com] subnotebooks and the local representative company here refused to order batteries for me saying the factory has some problem (don't know if it was true, but I am suspicious). I e-mailed the manufacturer in Taiwan, Dialogue Technology, first to notify them of the local representative's claims, and then to ask to import batteries. When my batteries came from Taiwan (Dialogue was very quick and professional in handling the issue for me), they were kept at the local customs here and upfront payment was required (within 3 days!). How much I paid to the customs? About the same as the cost of the batteries plus shipping! The cost was nearly doubled because of the taxes. I have also paid the same taxes (nearly 100%) for academic books I have imported from USA as well as for scientific-documentary DVDs that aren't available in EU. The funny thing is that the government would make much more money if lowered the import taxes, since a more sensible 20-25% import tax would allow people to import more products and more often.

If ever the US or EU propose a Euro-American customs union, I'll be the first to support it as loudly as I can. With China and other Asian countries becoming more powerful and the US sliding into debt, I don't think a future EU-US-Canada union is inconceivable (although by the time it happens China will be developing much more interesting products, and Taiwan already does!).

Re:Pretty hefty tax rate... (4, Insightful)

LBArrettAnderson (655246) | more than 6 years ago | (#21005099)

Well, that figure includes fines and stuff... the actual tax rate is probably closer to 100%.

For some odd reason, latin american countries charge a ridiculous amount of tax on electronics. In the Dominican Republic you can expect to pay double or triple the normal price for any and all imported electronics. I tried to have a $300 camera sent to me via DHL, and they wanted $400 to pick it up from customs (13000 pesos).

I call that the opposite of progress... unfortunately many governments can't see beyond "now." "Oh hey... we can just charge a ridiculous amount of money on imports and make money!!! we win!"...... (I understand the tarrifs to help local businesses... but honestly... there aren't any camera manufacturers in any of those countries).

Re:Pretty hefty tax rate... (2, Informative)

vbraga (228124) | more than 6 years ago | (#21005311)

Disclaimer: I'm brazilian.

Brazilian Federal Police is now for it's huge attention need - so, most operations end in many people being put in jail for a day or two, so they can get the newspapers. From what I heard from television, not all 60 people jailed where from Cisco Brazil, but most from the biggest Cisco distributor here (a local company). Also, some people from customs were jailed too (well, most probably from SRF, the local IRS).

But please, don't compare Brazil with Dominican Republic. I've been to Central America. I can buy a camera here from almost the same price I could in the US (well, Brazilians reading this, just calculate the prices from Casas Bahia to US Dollars). Brazil has a huge and well developed economy, and well, many, many tax benefits for eletronics imports - especially those used in business environment. Actually, there as a credit line from a major government owned development bank just for this, at least some year ago (from BNDES and Banco do Brasil, to brazilian readers again).

So, it's most the need for Federal Police to show up, some people will leave tomorrow and the rest, well, should be jailed anyway by brazilian law.

As stated above, take with a grain of salt.

Brazil import laws (3, Interesting)

yalmissari (1120097) | more than 6 years ago | (#21005057)

I'm shocked that it got this far. I've worked in international forwarding for over a decade, and have done more heavyweight shipments to Brazil than I can count. The laws for importation of almost ANYTHING is strict as hell. In almost all cases import duties and taxes must be paid for upfront before the shipment will be released from Brazilian customs. I have a feeling that if arrests were being made at CISCO there were also people in customs being taken down. Brazil is kind of a paradox in this regard. They have the strictest of import laws, but their system is damn corrupt. It would also not surprise me if this was nothing more than a money grab by the Brazilian government.

Brazil is pretty corrupt, and it's getting worse (0)

Anonymous Coward | more than 6 years ago | (#21005253)

http://ipsnews.net/news.asp?idnews=31688 [ipsnews.net]

But Joao Sampaio, a rubber planter from the southern state of Sao Paulo who is the president of the Brazilian Rural Society, an agribusiness association, sees things in a different light. In his view, "the PT created a whole new model of corruption."

"There has always been corruption in Brazil, but it used to be practiced by individuals, and now it involves institutions," including entire parties and Congress, and "public money" diverted from state-run companies, he argued.


http://www.zonalatina.com/Zldata245.htm [zonalatina.com]
There is no shortage of articles about corruption in Brazil.

I have no doubt that Cisco behaved badly. I also have no doubt that there's more to the story than we're seeing on the surface.

Re:Brazil import laws (2, Informative)

pdcull (469825) | more than 6 years ago | (#21005329)

The Globo TV news tonight reported that the goods were shipped in through Salvador airport, where customs officials were paid off to let them through.

So yes, there were more people involved, who have also presumable been taken down.

And no, this was no inocent mistake.

Re:Brazil import laws (1, Informative)

Anonymous Coward | more than 6 years ago | (#21005365)

Yeah, there are people being taken down in Brazillian Customs. If you read news regarding this story in portuguese, you'll get the following relevant information (not available in TFA):

- Customs employees at Salvador Airport are being investigated as collaborators to the act
- The five "American Corporates" are actually Brazilians working in ghost export companies in the US
    (So probably the US police is going to cooperate with this)
- Cisco Brazil ex-president and the current president were already arrested (so not just janitors)
- Investigations have been going for 2 years already
- Besides cisco, there is a number of import/export "ghost" companies ("laranjas") being investigated.
- It is not just "office equipment", like some comments here say - the imported products were being re-sold
    for lower-than-possible-prices in Brazil.

Relevant article (in portuguese)
http://g1.globo.com/Noticias/SaoPaulo/0,,MUL151436-5605,00-PRESIDENTE+E+EXPRESIDENTE+DA+CISCO+DO+BRASIL+SCAO+PRESOS+POR+SONEGACAO.html [globo.com]
http://www.estadao.com.br/economia/not_eco65806,0.htm [estadao.com.br]

I wish they did things like this in the US (-1, Flamebait)

Thaelon (250687) | more than 6 years ago | (#21005105)

I wish they did things like this in the US. If they did they could arrest the board of MS and other such companies for monopolistic practices rather than wrist slapping them with fines that are simply written off as a cost of doing business.

Must have forgotten (0)

Anonymous Coward | more than 6 years ago | (#21005107)

copy run start ...

n00bs....

I see all anti-Brazillian comments are (0, Troll)

superwiz (655733) | more than 6 years ago | (#21005131)

getting moded Troll. What the hell, I am not one for xenophobia, but national pride is almost as bad. So I'll throw my name in the troll hat. Please, wait until the rest of all Brazilian routers are confiscated before making the rest of your jokes. I mean are those jokes that good that they can't wait a day or two?

Re:I see all anti-Brazillian comments are (1)

Ungrounded Lightning (62228) | more than 6 years ago | (#21005241)

Please, wait until the rest of all Brazilian routers are confiscated before making the rest of your jokes. I mean are those jokes that good that they can't wait a day or two?

But then the people in Brazil won't see them.

Re:I see all anti-Brazillian comments are (1)

superwiz (655733) | more than 6 years ago | (#21005369)

But then the people in Brazil won't see them.
touche

Translation (5, Interesting)

Anonymous Coward | more than 6 years ago | (#21005157)

"Somebody in Brazil didn't get their cut of the bribe money."

I am American who set up a software company in India; a place with corruption on par with Brazil. Let me tell you how it works in places like these:

- There are laws, but they really don't mean anything.

Well, technically this isn't true. They amount to a list of things you can be charged with, should the authorities decide to make it so. In America you hire legal advice, get the proper paperwork from the government, fill out all the forms, and submit them on time with the appropriate payment; done. India and Brazil have a different system; and nobody (especially a government employee) is interested in helping you obtain the right paperwork and keep it above board. You see, *the perk* of a government job is THE BRIBE. A position in the government has a tiny salary, and your teenage kids probably earn more in babysitting. The majority of your income will be derived from bribes given by the people you serve. Americans might best understand it as a "filing fee", but without all the annoying paperwork and signatures.

This in pandemic through every part of every government office and official. From the clerk where you pay a parking ticket, the average cop on the street, all the way up to the very top of the chain. Most of these offices have forms, but filling them out is a formality; they probably won't read them, and they'll be locked away in a box and water damaged beyond recovery in a month or so. Computer backups? Ha! Yeah right. You're not going to find computers in government offices. How does that help in taking a bribe?

I am being very serious in saying all this, and I will recount two of my own true life experiences for you now:

1. I personally brought 10 computers with me into India. I was instructed by the head cop at the airport in Delhi what to write on the form (not 10 computers!), and how much to pay at the customs window. The remainder of the money went into his pocket after I handed it to one of his junior officers. (The junior officer takes the money, because the senior officer can protect him; but not vice versa.); my attorney in India estimates that after all of it, we saved $500 on the regular customs fees; which includes his own cut, for helping to arrange it.

2. I got married in India. In order to get my wedding certificate, I paid a Rs.4000/- bribe (about ~$80 USD at the time) to the clerk. It wasn't required, I could have simply shown up every day for two years until they finally got sick of dealing with me. Or, I can pay the "filing fee" and be on my way.

According to my co-worker, Brazil is really no different. Corruption is pandemic there as well. Instead of tensions between Hindus and Muslims, it's gangs that come down out of the mountains to raid the towns. (Americans thinking of traveling there might consider kidnapping insurance, as this is also not uncommon.)

------

Why would Brazil hold Cisco's peons in custody? Legal hostages for bribe money; that is all.

Next time, Cisco will need to remember to pay the "filing fee". "When in Rome..." always applies, no matter where you travel on this big dirtball.

Mod parent up. (2, Interesting)

Anonymous Coward | more than 6 years ago | (#21005385)

This has basically been my experience in a number of places, and it in combination with the idiotic FCPA laws in the U.S. put any firm trying to do business completely above-board at a massive disadvantage.

I'm not sure that I'd really even call it 'corruption' in the sense that we think of that word in the U.S. and Europe. It's different from that. There's no shame, no real criminality in it. It's how you show that you're serious, it's how you show respect for someone's position and authority. It's just how business gets done.

I've seen deals fall apart because someone would refuse to play by the local rules (because of internal rules or FCPA), and would in doing so offend the locals. Sometimes the amount of money or gifts wasn't even that big; but the idea of giving *nothing* is a huge slap in the face.

I strongly suspect that Cisco insulted someone, and this is the result.

At least they didnt do anything wrong (1)

Gothmolly (148874) | more than 6 years ago | (#21005205)

Except not pay protection^Wtaxes. Go Cisco.

Disgusting (2, Interesting)

Arthur B. (806360) | more than 6 years ago | (#21005255)

So... Cisco's big and Brazil government figures it can make some quick bucks by looting... hey, who cares if this network equipment actually helps Brazil to develop, Cisco has money, we have guns, let's take it and let everyone know that they can't do business here without paying protection money. Oh sure on the short term they (the officials) will get the money and people will keep investing in Brazil, on the long term they're driving everyone to poverty.

Silly Brazil (5, Interesting)

bucky0 (229117) | more than 6 years ago | (#21005271)

I travel to brazil pretty often because of all the family I have that lives there. The tarrifs on electronics and DVDs is a ridiculous amount like 50%. In fact, to make some cash, I know people who will come to the states and smuggle iPods back. If they get through customs, they can make a pretty penny selling them to people in Brazil. (Prices are about 2x of what they are in the states because of the import duties.

Clearly, this was a routing problem (3, Funny)

SpaceLifeForm (228190) | more than 6 years ago | (#21005277)

Is there a patch in the works?

Oblig. (2, Funny)

ThatsNotPudding (1045640) | more than 6 years ago | (#21005283)

Oh, Pancho!

Isn't it usually cisco sending out the lawyers? (1)

sethstorm (512897) | more than 6 years ago | (#21005333)

I guess they haven't seen things from the other end like this(as in being legally outgunned) in ages.

how could this happen ... (2, Interesting)

Shadukar (102027) | more than 6 years ago | (#21005417)

I think a lot of people do not realize how these things happen. basically, in any profit driven company, everyone has to answer to accountants.

Yeah, the ceo, the manager, the compliance officers, etc are not accountants. But they have to act like accountants. Profit/bottom line is everything - if you are doing something that is hurting the profit/bottom line you are doing it wrong - people are asking questions. At the end of the day, companies are out to make money and absolutely nothing else.

Sure, there are nice slogans, customers first, service is our priority, etc. American Express (where i used to work) used to distribute these nice flow diagrams that show Happy Staff ===> Happy Customers ===> Happy shareholders. There's focuses and sigma programs and etc.

At the end o the day however, it is all about profits, revenue - money.

How does this tie with Brazil "pwning" some executives ?

Someone came to the executives and said "I know a guy in Brazil that can help us save millions in tax, compliance officers/lawyers have checked it out and it is pretty borderline. Risk management department have cleared it as acceptable risk vs the savings, is it ok to go ahead ?"

Now, perhaps one or two executives thought to themselves "hrm, this doesn't sound good" or "we'll get busted and get raped with cattle prods"

But what can you say/do when your primary consideration is the next quarter profit projection or current quarter revenue reports ? You just cant argue against higher profit/revenue.

At the end of the day (again) any executive has a dozen explanations/justifications for their actions:

- the compliance officers/lawyers cleared it.
- we were direct orders to meet the profit projections
- we were direct orders to meet our key performance indicators
- it is the mission/directive of our department to maximise profit/efficiency/kpi/etc
- risk management cleared it
- we were only competing with the competitors

I wish I was at home and could get the appropriate quote from one of the Dune books where the chapter start quote talks about the qualities of a bureaucrat - how the epitome of a perfect bureaucrat is the loss of human qualities and strictly following procedures/policies.

what i am trying to say is, in a long convulsed way, is that not only there is no morality in big companies, there is no accountability for legal or moral wrong doings (quite often two separate things).

I for one applaud our new executive-arresting overlords!

In the end... (3, Insightful)

Merovign (557032) | more than 6 years ago | (#21005431)

This will probably turn into a pretty rapid-fire he-said she-said involving bribes, corruption, and really bad moves.

The high tarrifs, bribes, and corrupt officials make this kind of thing inevitable, but it was still stupid to try to get around the taxes. Understandable, in the sense of closing your fruit stall during the shift of the corrupt cop who collects protection money, but still stupid.

The problem is that, like India, the Brazil market is big enough for people to take risks to sell there.

We'll have to see how it turns out, but I'd place a small bet that the local Cisco office bribed the wrong official - who either turned on them or done got themselves busted.

That's why a (relatively) honest system is so important - certainty.
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