Cisco Sour: The Panamanian Connection

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“Alcogal” also lists Citibank N.A., Banco Santander, Siemens, Chiquita Brands, Phillip Morris, Payless Shoesource, and the Cisneros Group (Venevision) as clients. Federal police and prosecutors described it, in press statements, as “responsible for a number of such irregular schemes in the region.” That was actually the most ominous note struck in the whole affair, I thought. Click to zoom.

Caso Cisco tinha ligações no Panamá: Despite complaints from Alberto Dines that this story is not being treated with a sufficient roar of scandal, naming names and pointing fingers, Marcelo Godoy and Marcelo Auler of the Estado de S. Paulo business desk — “the two Marcelos,” as they are known when they moonlight as a dupla sertaneja in grimy corner botecos — are doing a pretty decent job of quietly and methodically compiling a “who’s who” and an X-ray of the clockwork of the laranja-driven “business ecosystem” of the whole affair.

Mostly based on inside cop sources, as usual. Most Brazilian investigative reporting seems to be based on leaks from ongoing investigations, it sometimes seems.

See also

O escritório de advocacia no Panamá é o elo entre a Cisco Systems e o esquema de offshore e empresas fantasmas no Brasil e nos Estados Unidos, acusado de fraude fiscal e tributária de R$ 1,5 bilhão. Apontado como o responsável pela montagem do esquema envolvendo 15 empresas em paraísos fiscais do Caribe, o escritório Alemán, Cordero, Galindo & Lee anuncia entre seus clientes a Cisco Systems Inc., a matriz da multinacional cuja filial brasileira está sob investigação da Polícia, da Receita e do Ministério Público Federais. Todas as offshore teriam uma função chamada “patrimonial”, ou seja, são suspeitas de lavagem de dinheiro.

The Panamanian law firm is the link between Cisco Systems and the scheme involving the use of offshore and shell corporations in Brazil and the U.S. to allegedly commit tax and fiscal fraud in the amount of R$1.5 billion. Pointed to as responsible for setting up the network of 15 companies in Caribbean banking paradises, the law firm Alemán, Cordero, Galindo & Lee announces Cisco Systems, Inc. the corporate parent of the Brazilian subsidiary under investigation, as one of its clients. All the offshore corporations allegedly played an [“asset management”] role; that is, they are suspected of money-laundering.

It is also a firm being looked at by Chilean justice as being involved in the business affairs of the late Augusto Pinochet. More on that in a bit.

Quatro panamenhos são investigados no caso: Miriam Estela Rivera, Myrna de Navarro, John Benjamin Foster e Andres Maximino Sanchez. Eles são ligados ao escritório de advocacia, conhecido também como Alcogal, e são apontados como “sócios interpostos de diversas offshore”. A investigação da PF não deixa dúvida: a Cisco Systems Inc. é chamada de “beneficiária” do esquema, assim como a Cisco do Brasil Ltda.

Four Panamanians are under investigation in the case: Miriam Estela Rivera, Myrna de Navarro, John Benjamin Foster and Andres Maximino Sanchez, all tied to the lawfirm, which is also known as Alcogal. They are pointed to as “intermediary partners in various offshore corporations.” The federal investigation leaves no doubt about it: Cisco Systems, Inc is named as a “beneficiary” of the scheme, along with Cisco do Brasil Ltda.

Still better than being named as the “mastermind” of the scheme.

O escritório panamenho tem ainda entre seus clientes bancos americanos e europeus, internacionais, multinacionais dos ramos de alimentação, tabaco e eletrônicos presentes no Brasil. Em São Paulo, o esquema das offshore criado pelo Alcogal teria relações com uma advogada que trabalha num escritório na Rua Estados Unidos, nos Jardins. Ali a PF cumpriu um dos mandados de busca e apreendeu um computador. A prisão da advogada não foi decretada pela Justiça.

The Panamanian lawfirm also lists American, European and international banks, as well as companies from the food, tobaccco and electronic sectors with a presence in Brazil. In São Paulo, the scheme created by Alcogal may have relations with a lawyer who works in an office on Estados Unidos Street, in Jardins.

I used to stay in a flat right near there!

Maybe me and Neuza even met the lady at that Scottish pub near there — reputedly the best place in town to go roar “The Minstrel Boy” drunkenly and get slapped on the back until you swallow a lit cigarette, in the fine old Celtic tradition.

There, the police served one of its search warrants, seizing a computer. An arrest warrant for the attorney was not issued by the court.

A primeira das offshore usadas no esquema, segundo os investigadores do caso, foi a FulFill Holding Ltd, com sede das Ilhas Virgens Britânicas. A empresa está registrada como uma exportadora. Além dela, outras seis offshore com sede no mesmo país estão sob investigação. São elas: a Algen Limited, a Bravo Trading Ltd., a Cansons Investiments, a Raywell Overseas Ltd., a Strasberg Overseas Ltd e a Superders. A grande quantidade de offshore era mais uma tentativa de proteger o esquema. Cada vez que uma delas começava a ser investigada, a empresa era abandonada pelo esquema, que montava outra para substituí-la.

The first of the offshores used in the scheme, according to investigators, was FulFill Holding Ltd., incorporated in the British Virgins. The company is registered as an exporter. Another six offshore corporations from the British Virgins are also under investigation: Algen Limited, Bravo Trading Ltd., Cansons Investiments, Raywell Overseas Ltd., Strasberg Overseas Ltd and Superders. The proliferation of offshore firms was one more way of concealing the scheme. Each time one of them came under investigation, it was abandoned by the scheme, which set up another to replace it.

A PF relaciona ao esquema ainda seis offshore nas Bahamas, entre elas a Software Links Ltd. Suspeita-se que algumas dessas offshore tenham sido usadas para justificar a saída de divisas do Brasil como se se tratasse do pagamento de direitos autorais de softwares. Os proprietários desses direitos, porém, seriam fantasmas usados para a lavagem do dinheiro por meio da ocultação de patrimônio de empresas e executivos investigados. Além do escritório Alcogal, foram relacionadas ao esquema outras três empresas com sede no Panamá.

The feds also tie six offshores in the Bahamas to the scheme, among them Software Links Ltd. It is suspected that some of thse offshores were used to justify getting out of import duties by representing the transaction as involving payment of software licenses. The licensors, however, were allegedly fictious, used to launder money by hiding assets of the companies and executives being investigated. Besides Alcogal, another three Panama-based companies were tied to the scheme.

O esquema usou ainda oito empresas suspeitas de serem fantasmas nos EUA. Elas teriam sede em Miami, na Flórida. Entre elas, estava a South America Overseas Ltd., responsável por exportar mercadorias para as offshore, que as repassavam para as empresas fantasmas montadas no Brasil. A Receita apurou que a maioria dessas empresas tinha como sede uma mesmo endereço – mudava apenas o número da sala num prédio de Miami.

The scheme used another 8 firms suspected of being shell corporations in the U.S., based in Miami, Florida. Among them are South America Overseas Ltd., responsible for exporting goods to the offshore companies, who sent them on to shell corporations set up in Brazil. The tax authority discovered that most of these companies list the same business address at the same building in Miami, the only difference being the room number.

Segundo a PF, três empresas americanas são ligadas à Mude Comércio e Serviços Ltda. Trata-se da Mude Latan LLC, da Mude USA e da Mude Investiments Corp. Oficialmente, a Mude seria uma distribuidora de produtos da Cisco no Brasil, mas a suspeita é que ela fosse o departamento de importações da multinacional no País. O ex-presidente da Cisco Carlos Roberto Carnevali estaria por trás da Mude. Outra empresa investigada no esquema é a What’s Up Business. Reinaldo de Paiva Grillo, um dos sócios da What’s Up, é o gerente de logística da Mude.

According to the Brazilian feds, the American firms are associated with MUDE Comércio e Serviços Ltda. There are called MUDE Latan LLC, MUDE USA, and MUDE Investments Corp. Offically, MUDE is a distributor of Cisco products in Brasil, but is suspected of actually serving as Cisco’s [de facto] import department in Brazil. Former Cisco Brasil president Carnevali is thought to be behind MUDE. Another firm investigated in the scheme is What’s Up Business. Renaldo Paiva Grillo, one of the partners in What’s Up, is MUDE’s logistics manager.

Still hardly any coverage of the tax authority employees arrested and charged with official corruption (taking bribes, I think). Which I think is the principal public-interest angle on the story, really, and also, as I understand it, the point of departure for the investigation.

The feds here are not going around running court-ordered wiretaps on multinational corporations. They are wiretapping public employees suspected of being crooked, and discovering who they are talking to.

Risk-management takeaway: Do not make indecent proposals to, or entertain indecent proposals from, Brazilian customs inspectors or tax auditors. Not on the telephone, at any rate.

(Whether your VoIP network is secure from this point of view is actually kind of an interesting technical question.)

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