Caterpillar probed for dumping train parts into sea - WSJ


Nov 22 (Reuters) - A unit of Caterpillar Inc isbeing probed by federal investigators to determine if it haddumped train parts into the ocean off California as part of ascam to charge customers for parts they didn't need, the WallStreet Journal reported.

Investigators are probing whether Progress Rail was dumpingbrake parts and other items into the sea near the Port of LongBeach to conceal evidence that it was charging owners of railequipment for replacing parts that were still in good shape, thepaper said, citing people familiar with the matter.

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

Railroad operator Union Pacific Corp was onecustomer believed to have been affected by the allegedactivities, 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 ofsuspicions that Progress Rail was breaking environmental laws,according to a person familiar with the situation, the Journalsaid.

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

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

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