March 8 (UPI) -- A report commissioned by the U.S. government accuses construction equipment company Caterpillar of tax and accounting fraud.
"Caterpillar did not comply with either U.S. tax law or U.S. financial reporting rules. 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," Dartmouth College accounting professor Leslie Robinson said in the report, The New York Times reported Tuesday. While it is not clear which agency of the government commissioned the 84-page report, Robinson wrote in the report that it is related to the Federal Deposit Insurance Corporation Office of Inspector General's investigation of the company.
Caterpillar's headquarters in Peoria, Ill., was raided by law enforcement officers last week, who executed a search and seizure warrant. A company statement said Caterpillar was cooperating with the officers.
Robinson's report has not been made public, and a Caterpillar spokeswoman said the company has not been provided with a copy, but The New York Times reported it outlines a complex corporate strategy for returning billions of dollars held in offshore accounts to U.S. accounts without payment of federal income taxes on earnings.
Caterpillar's tax practices came to the attention of a Senate committee at a 2014 hearing in which it was revealed that the company cut $2.4 billion from its federal tax bill over 13 years by moving earnings to a Swiss subsidiary. Internal company warnings indicated tax avoidance was the only intent of the earnings move. In 2016 Caterpillar disclosed it received a federal subpoena seeking documents pertinent to the maneuver and other information regarding its foreign units. It since revealed it is "vigorously contesting" an Internal Revenue Service demand for $2 billion in back taxes and interest.
In pre-market stock trading Wednesday, shares of Caterpillar, a component of the Dow Jones Industrial Average, fell $2.13 to $93.80 per share.