Caterpillar subsidiary says it cheated customers, pays $20M


LOS ANGELES (AP) — A subsidiary of Caterpillar Inc. will pay $20 million after acknowledging it charged customers for unnecessary repairs to railroad cars and tossed parts into the ocean off Los Angeles to hide the scam.

Prosecutors say United Industries entered a plea Thursday to a federal water pollution charge. It was fined $5 million and ordered to pay $20 million to three companies that owned railcars.

United Industries had a repair facility at LA’s Terminal Island. In a plea agreement, the company acknowledged workers replaced functioning parts, including brake shoes, and tossed them into Long Beach harbor to hide evidence of the fraud.

Prosecutors say the scheme came to light when Long Beach port authorities got a tip about illegal dumping and divers found the parts.

United Industries no longer repairs railcars.

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