Caterpillar probed for dumping train parts into sea: WSJ

Fri Nov 22, 2013 7:42am EST

The company logo is seen on top of a building, where Caterpillar (China) Investment Co., Ltd. is located, in Beijing, January 22, 2013. REUTERS/Jason Lee

The company logo is seen on top of a building, where Caterpillar (China) Investment Co., Ltd. is located, in Beijing, January 22, 2013.

Credit: Reuters/Jason Lee

(Reuters) - A unit of Caterpillar Inc (CAT.N) is being probed by federal investigators to determine if it had dumped train parts into the ocean off California as part of a scam to charge customers for parts they didn't need, the Wall Street Journal reported.

Investigators are probing whether Progress Rail was dumping brake parts and other items into the sea near the Port of Long Beach to conceal evidence that it was charging owners of rail equipment for replacing parts that were still in good shape, the paper said, citing people familiar with the matter.

Progress Rail, which was acquired by Caterpillar in 2006 for about $800 million, repairs locomotives and railcars.

Railroad operator Union Pacific Corp (UNP.N) was one customer believed to have been affected by the alleged activities, the newspaper said, citing the people. (

The grand jury investigation is being conducted by the U.S. Attorney for the Central District of California because of suspicions that Progress Rail was breaking environmental laws, according to a person familiar with the situation, the Journal said.

Executives at Caterpillar and Progress Rail were unavailable for comment outside normal office hours.

Earlier this year, the world's largest maker of mining and construction equipment wrote off most of the $654 million value of its purchase of ERA Mining Machinery Ltd after uncovering "deliberate, multi-year, coordinated accounting misconduct" at ERA subsidiary Zhengzhou Siwei.

(Reporting by Rohit T. K. in Bangalore; Editing by Maju Samuel)

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Comments (7)
AlkalineState wrote:
Corporations will police themselves.

Nov 22, 2013 12:15pm EST  --  Report as abuse
bodybait wrote:
The will pay a small fine, and given more govt. money.

Nov 22, 2013 5:24pm EST  --  Report as abuse
bhockey1 wrote:
Caterpillar needs a lesson in due diligence. Either they need new in-house counsel, or if who they have is worthwhile, they need to start listening to the counsel they have.

Nov 23, 2013 5:14am EST  --  Report as abuse
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