Minnesota residents who have heard reports of people facing criminal charges for alleged tax fraud or tax evasion should know that companies may also face these types of charges. In addition, companies can even be sued in civil court for such actions.
An example of this can be seen today in Illinois where a group of shareholders have filed a lawsuit against Caterpillar alleging that the company violated the Securities Exchange Act. A former employee is said to have reported that the company for many years sold and shipped products from the United States but attributed the corresponding profits to entities or business unit in other countries including Switzerland and Bermuda.
The actions are said to have been taken as a deliberate effort to avoid paying taxes in the U.S. The company is accused of avoiding more than $2 billion in U.S. tax payments due to the alleged scheme. The lawsuit also alleges that Caterpillar lied in order to protect its stock prices which have actually dropped as a result of the lawsuit becoming public. The case will be heard in a federal court in Illinois as the company is based in Peoria. Among the actions said to be taken are the presentation of false quarterly and annual earnings reports.
When faced with serious federal white collar crime charges, Minnesota residents or company representatives may want to talk with an attorney in part to learn about the potential for civil charges in addition to criminal ones.
Source: Courthouse News Service, “Shareholder Accuse Caterpillar of Tax Fraud,” Kevin Koeninger, March 6, 2017