CEO sentenced for Made In The USA boot scam
KNOXVILLE, Tennessee (WDEF) The ex-President and CEO of a Tennessee company has been sentenced for fraud in a “Made In The USA” scam.
Prosecutors says that Wellco Enterprises sold military footwear, even supplying the Department of Defense.
They touted the boots as Made In the USA to the DOD.
But in reality, the boots were being shipped from China to the company plant in Morristown.
At first, the company had the Chinese makers put USA labels on the boot uppers.
But a shipment of those were confiscated off the boats arriving from China.
So then the company had their makers put a Made In China label on them, which workers would then tear off at the Tennessee plant.
They sold $8,100,000 worth of the boots under false pretenses.
Prosecutors say CEO Vincent Lee Ferguson of Knoxville was sentenced to 41 months in federal prison on Monday for wire fraud conspiracy.
His V-P for Sales and Director of Marketing have already been sentenced to six month terms.
“The U.S. Attorney’s Office will prosecute aggressively dishonest companies and individuals who take advantage of the United States and potentially put our military men and women in danger by fraudulently selling them counterfeit equipment which does not meet the standards set by the Berry Amendment and the TAA,” said U.S. Attorney J. Douglas Overbey.
Federal investigator John Khin added, “While the United States continues to combat enemies foreign and domestic, corrupt individuals attempt to take advantage of our service members and exploit our Defense Department’s supply chain. DCIS investigations relentlessly pursue allegations of fraud, waste and abuse.”
And Homeland Security investigators were also involved.
Special Agent 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 it 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.”