Federal agents raid Caterpillar offices in central IL

The lawsuit also names Caterpillar Chief Executive Jim Umpleby, Chairman Douglas Oberhelman and Chief Financial Officer Bradley Halverson as defendants.

Sources say that law enforcement is present at Caterpillar headquarters in downtown Peoria, Building AD in East Peoria and the logistics building in Morton.

After federal law enforcement agents raided three of its facilities on Thursday – possibly due to a tax strategy that shifts billions of dollars in profits to a subsidiary in Switzerland – Peoria-based Caterpillar apologized to its staff.

The Journal Star reports that the search may be connected to allegations about Caterpillar’s tax strategy that was outlined in a 2009 wrongful termination lawsuit by a former employee.

News of the raids sent Caterpillar stock falling almost 4% to $94.60/share.

The Trump administration’s apparent crackdown on United States firms shifting profits to lower tax countries is another blow for Switzerland, which is struggling to adapt its tax laws to meet global standards.

The report said the firm transferred profits of its parts business to the Swiss subsidiary even though no employees or business activities were moved there.

It included undistributed profits of non-US subsidiaries and the movement of cash among USA and non-US subsidiaries.

The facility in Morton, according to the company’s website, is responsible for receiving and shipping after-market parts to parts facilities and Cat dealers worldwide.

The identical search warrants allowed the federal government to seize a wide range of documents, hardware and software related to the movement of any products between the US and Switzerland, specifically the Swiss Subsidiary Caterpillar created.

Trump said he would try to visit the company soon.

Caterpillar said it was unable to predict the investigation’s outcome or potential losses.

Companies often face USA lawsuits accusing them of securities fraud shortly after unexpected negative news causes a decline in their stock prices.

There is no word yet regarding what led to the investigation or what may have been found. Further, it could be restricted from bidding for federal contracts, which would be a big blow given that Caterpillar is touted to be one of the biggest beneficiaries from the infrastructure plan.

Caterpillar spokeswoman Corrie Heck Scott said in an email that the company is cooperating with law enforcement. In its defense, the company stated that the relevant transactions complied with applicable tax laws and did not violate judicial doctrines.

A spokesman for the FDIC declined to comment on the raids.