Federal law enforcement agents raided Caterpillar’s headquarters on a search and seizure warrant March 2. A government-commissioned report is accusing the manufacturer of tax and accounting fraud.
“Caterpillar did not comply with either U.S. tax law or U.S. financial reporting rules,” wrote Leslie A. Robinson, an accounting professor at the Tuck School of Business at Dartmouth College and the author of the report. “I believe that the company’s noncompliance with these rules was deliberate and primarily with the intention of maintaining a higher share price. These actions were fraudulent rather than negligent.”
Caterpillar issued a statement saying the company believes the search warrant is regarding export filings, among other things. The company said it is cooperating with law enforcement.
No charges have been filed and the report has not been made available to the public, or to Caterpillar.
The company’s tax practices have been under investigation since a 2014 Senate hearing found that the company cut its tax bill by $2.4 billion over 13 years by moving its earnings out of the U.S. and into a Swiss subsidiary.
Caterpillar’s stock fell 4 percent following the raid.
For more on this story, visit the Forbes website.