A U.S. military boot maker has received a prison sentence for fraud after he imported boots from China and replaced the “Made in China” label with “Made in the USA.”
Military Boot Maker Sentenced
66-year-old Vincent Lee Ferguson, the former president and CEO of Wellco Enterprises, has been sentenced to over three years in prison for his role in a wire fraud conspiracy, MilitaryTimes reports. The company’s former Senior VP of Sales, 41-year-old Matthew Lee Ferguson; and former Director of Marketing and Communications, 36-year-old Kerry Joseph Ferguson; were each sentenced to six months in prison in June for the same crime.
According to a statement from the U.S. Attorney’s Office for the Eastern District of Tennessee, Wellco supplied military footwear to both DoD and civilians for over 70 years. From 2006 through 2012 alone, Wellco was paid over $138 million by DoD for combat boots.
The scheme ran from December 2008 through August 2012. Ferguson conspired to import boots from China during that time. He then tried pass them off as American-made to DoD, government contractors and the general public. The Berry Amendment requires uniform items to be American-made.
The Fraud
In its news release, the Eastern District breaks down exactly how the fraud went down:
To conceal the fraud, the conspirators required the Chinese manufacturing facility to include “USA” on labels of boot uppers. After two shipments of these deceptively marked boots were seized by the U.S. Department of Homeland Security’s Customs and Border Protection, the conspirators ordered the Chinese facility to stitch tear-away “Made in China” labels in Wellco boot uppers. After importation, the conspirators instructed Wellco factory workers in Morristown, Tennessee, to tear out the “Made in China” tags prior to shipping the boots to government and commercial purchasers.
Wellco sold over $8.1 million in fraudulent boots, the release says.
“Falsely selling our military millions of dollars of combat boots by saying they were ‘Made in the USA’ when they are actually Chinese-knockoffs not only defrauds the government, but also defrauds the American soldier,” said Assistant Special Agent in Charge Robert Hammer. “Our soldiers rely on their equipment, from their guns to their boots, to protect this country, and counterfeit products could fail at a moment when they need them the most.”
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