Five former executives and employees of Wellco Enterprises Inc., a Tennessee maker of military boots, were indicted in federal court in Greeneville, Tennessee, in September 2016. Prosecutors charged that they imported boots made in China and sold them to the U.S. military as “Made in the USA.”
The charges
According to U.S. Immigration and Customs Enforcement, the five were indicted on Tuesday, Sept. 13, 2016. They appeared before U.S. Magistrate Judge Clifton Corker on Thursday, Sept. 15, pleaded not guilty and were released on bond, Military Times reported.
The defendants were:
- Vincent L. Ferguson, 65, of Knoxville, Wellco’s president and CEO from 2006 to 2012
- Matthew L. Ferguson, 40, of Lenoir City, senior vice president of sales
- Kerry J. Ferguson, 35, of Houston, marketing director
- Matthew H. Martland, 32, of Knoxville, director of distribution and logistics
- Stephanie L. Kaemmerer, 44, of Knoxville, inside sales manager and operations manager
The counts included wire fraud, major fraud against the United States and smuggling goods into the country.
The alleged scheme
Prosecutors said the defendants conspired from December 2008 through August 2012 to import military-style boots made in China and market them to the armed forces, government contractors and the public as “Made in the USA.” Defense Department agencies were required by federal law to buy USA-made footwear for troops.
From 2006 through 2012, the Defense Department paid Wellco more than $138 million for military footwear, according to the indictment.
Wellco started in Waynesville, North Carolina, and was known for developing the “jungle boot” used during the Vietnam War. Investment firms acquired it in 2007. It opened a large plant in Morristown, Tennessee, in November 2009. The company and its holding company sought protection from creditors in 2014.
For the outcome of the case, see our coverage of the former CEO’s 2018 sentencing.
FAQ
What were the defendants accused of?
Selling Chinese-made military-style boots to the U.S. military and others as “Made in the USA.”
How long did the alleged scheme run?
From December 2008 through August 2012, according to prosecutors.
How much did the Defense Department pay Wellco?
More than $138 million for military footwear from 2006 through 2012, according to the indictment.
Source & credit
Source: Military Times: “Made in America? 5 charged with fraud in alleged boot scheme”, Sept. 16, 2016.
Also: U.S. Immigration and Customs Enforcement news release, “5 indicted for fraud against the US Government in ‘Made in America’ marketing scheme,” September 2016.