Caterpillar's Progress Rail reaches plea deal on fraudulent repairs

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LOS ANGELES — Caterpillar is on the hook for $25 million in fines and restitution after company officials pleaded guilty on the company's behalf to defrauding freight car owners on repairs.

The Wall Street Journal reported on Thursday that United Industries, a unit within Caterpillar's Progress Rail division, accepted a plea deal with federal prosecutors and admits that its employees made fraudulent or unnecessary repairs to freight cars that visited the company's shops near the Port of Long Beach, Calif.

The Wall Street Journal reports that United employees used hammers to break brake components, chisels to damage wheel treads, and chains to yank loose safety appliances.

To conceal evidence of the damage, workers even dumped certain parts into the Pacific Ocean, prompting a federal charge for dumping refuse in navigable waterways.

The newspaper reports that the dumping occurred in 2008 and 2009 while the criminal investigation first came to light in 2013.

More information is available online.
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