US officials have raided three Caterpillar sites as part of a criminal probe into tax irregularities at the heavy machinery manufacturer.
The raid sent the company's stocks sharply lower to close down 4.3%.
Caterpillar said it thought the probe was linked to profits from Swiss subsidiary CSARL.
The company is accused of shifting billions of profits abroad to avoid paying taxes in the US.
The officials searched the headquarters of the company, one of the world's largest makers of construction and other heavy equipment, in Peoria, Illinois. Two other sites in Illinois were also raided under the federal warrant.
The raids come as the Trump administration plans to overhaul corporate taxes to keep jobs and profits within the country.
The subsidiary in Switzerland was the focus of a 2014 investigation by the US senate alleging it was set up to shift billions of profits abroad to avoid paying taxes in the US.
Swiss tax deal
A subsequent report by Senate Democratic staff accused Caterpillar of having avoided paying $2.4bn in US taxes since 2000 by shifting profits abroad.
The report said the firm transferred profits of its parts business to the Swiss subsidiary even though no employees or business activities were moved there.
The income was then taxed at a special rate of 4% to 6% that Caterpillar negotiated with the Swiss government, the report said. This meant that only 15% of the profits from its parts business were taxed in the US whereas beforehand 85% had been subject to US taxation.
The US Internal Revenue Service demand Caterpillar pay back $2bn in taxes and penalties for profits assigned to the CSARL subsidiary.
The machinery maker though is also part of the Trump administration's effort to promote US manufacturing.
Last week, outgoing Caterpillar chairman Douglas Oberhelman met US President Donald Trump at the White House.