What Happened At Caterpillar? Billions Of Profits Hidden Overseas Cause Federal Raids, Reports Say

Major construction equipment manufacturer Caterpillar was reportedly raided Thursday by federal authorities for an investigation into the company’s taxes, according to media reports. The raids caused the company’s stock to plummet by nearly five percent.

The company’s headquarters in Peoria, Illinois, as well as three of its facilities around the state, were searched by agents wearing attire from the Internal Revenue Service, while others may have been from the Federal Deposit Insurance Corporation, and a vehicle tagged as from the Department of Commerce was also present, the Peoria Journal Star reported.

The busts were led by the U.S. Attorney’s Office in the Central District of Illinois, and while Caterpillar’s stock has climbed 35 percent over the last 12 months, it fell by more than 5 percent Thursday, Forbes reported.

The company’s most recent annual 10-K filing stated it received a grand jury subpoena in January 2015 for records on its moving cash overseas.

In another 10-K filing issued on Feb. 15, the company issued another statement. "We currently believe that this matter will not have a material adverse effect on the Company’s consolidated results of operations, financial position or liquidity," Caterpillar stated according to Forbes.

According to the Star, the investigation may stem from a wrongful termination lawsuit filed by a former employee named, Daniel Schlicksup. The suit claimed Caterpillar had sent more than $2 billion worth of profits to overseas shell companies in an effort to avoid taxes. The suit was settled back in 2012.

Schlicksup also alleged in the suit that attributed roughly $5.6 billion in profits to sales in Geneva, Switzerland between 2000 and 2009.

The company said in a statement to The Star that it had "cooperated" with the raids at its Peoria, East Peoria and Morton facilities.

At the time of publishing, Caterpillar’s stock (CAT) had gone slightly back up to $93.94, but was still down 4.71 percent after opening Thursday at a price of $98.49.