Five company executives were sentenced after fraudulently mislabeling military combat boots with falsified country of origin labels.
Vincent Lee Ferguson, 66, of Knoxville, Tennessee was sentenced to at least 30 months in a federal prison for fraud after importing boots from China, relabeling them as USA-made, and selling them. He is the former president and chief executive officer of the principal boot making company for the U.S. military, Wellco Enterprises, Inc., Military Times reported.
Five individuals were indicted, including the former Senior Vice President of Sales Matthew Lee Ferguson, 41, and former Director of Marketing and Communications, Kerry Joseph Ferguson, 36, who were also sentenced to six months in prison last June for the same crime. Two others received probation.
Wellco Enterprises, Inc. has supplied combat boots to the Department of Defense for more than 70 years. Between 2006 and 2012 alone, the DoD spent more than $138 million on the boots.
U.S. military uniforms and accessories must be manufactured in the United States, a requirement under the Berry Amendment.
The U.S. Attorney’s Office for the Eastern District of Tennessee said that Ferguson and his accomplices started the Chinese import scheme in December 2008 and continued through August 2012, selling more than $8.1 million of boots during that time.
The indictment filed in U.S. District Court states that the manufacturer in China was instructed to include “USA” on the label of Wellco boot uppers that were then shipped to the U.S.
— Marine Corps Times (@Marinetimes) August 20, 2018
They were also ordered to remove the “Made in China” tags and to allow the soles of the boots to be attached at Wellco’s plant in Morristown, Tennessee.
Ferguson and two others pleaded guilty to conspiracy to commit wire fraud.
Two others pleaded guilty to smuggling goods into the U.S. One other executive pled guilty to aiding and abetting the altering of country of origin marks, according to their plea agreements, The Charlotte Observer reported.
The U.S. Department of Homeland Security’s Customs and Border Protection confiscated two shipments of the fake combat boots that were preparing for shipment, all of which contained the manufacturer’s tear away “Made in China” tags.
Defense Criminal Investigative Service Assistant Special Agent in Charge, Robert Hammer, said: “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. 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.”