A company that repaired railcars at a Terminal Island facility in California had pleaded guilty to a federal environmental offense. The company has admitted to dumping parts into the ocean to hide the fact that it was performing unnecessary and improper repairs for several operators. United Industries LLC, which is a subsidiary of Progress Rail Services Inc., pleaded guilty to the federal water pollution charge.
Progress Rail Services is a subsidiary of Caterpillar. After the guilty plea, the company was ordered to pay a $5 million criminal fine and $20 million in restitution to three victim companies, Pacer International, TTX Company, and Greenbrier Company. All companies owned and operated railcars that were improperly repaired and serviced.
In a plea agreement, United Industries admitted that its employees “knowingly conducted inadequate inspections” on railcars serviced by the company. The company’s employees improperly replaced functioning parts that did not need to be removed or replaced. Workers also made random repairs without first conducting a proper inspection. Then, the victim companies were charged for the unnecessary repairs.
Port authorities conducted underwater dives after receiving a tip about possible improper dumping. The divers discovered a large debris field and recovered railcar parts that did not show any signs of mechanical wear that would have justified a replacement. Shortly after the investigation started, United Industries left the industry and now no longer repairs railcars. The investigation did not find any rail accidents that could attributed to the company’s illegal activities.
Additional details can be found here.