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Former Executives of Boot Manufacturer Sentenced Over False “Made in USA” Claims

Five former executives of a once-leading manufacturer of combat boots for the U.S. military have been sentenced on federal fraud and smuggling charges for making false claims about the footwear’s provenance, the Kingsport Times-News reported last week. 

From December 2008 to August 2012, CEO Vincent Lee Ferguson and the management team at Wellco Enterprises sold $8 million worth of boots they had marketed as being made in the USA, according to court records.

But the boot uppers and insoles were manufactured in China and only the soles were attached at Wellco’s Morristown, Tenn.-based facility, the newspaper said. Prosecutors claimed the defendants originally told their Chinese supplier to include the American flag and/or “USA” on the labels of certain boot uppers while omitting any reference to the true country of origin.

After a couple of shipments of these “deceptively marked” boots were seized by the U.S. Department of Homeland Security’s Customs and Border Protection, however, Ferguson and his team instructed the Chinese factory to stitch tear-away “Made in China” labels in the boot uppers, the Kingsport Times-News said.

Post-importation, the so-called conspirators ordered Wellco factory workers in Morristown to rip out the “Made in China” tags before shipping them to government and commercial buyers.

Wellco filed for Chapter 11 bankruptcy in July 2014. A month later, most of the company’s assets were purchased by Original Footwear Holdings, which owns the Altama, Original S.W.A.T. and Smith & Wesson Footwear brands.

Matthew Lee Ferguson, former vice president of sales, and Kerry Ferguson, former director of marketing and communications, were sentenced to six months in prison for conspiracy to commit wire fraud. Neil Streeter, former vice president of government contracting and Stephanie Lynn (Ferguson) Kaemmerer, were sentenced to five years of probation for smuggling goods into the United States. Matthew Harrison Martland, former director of distribution and logistics, was sentenced to six months of probation for aiding and abetting the alteration of country-of-origin marks.

Vincent Lee Ferguson, who was also Wellco’s president, pleaded guilty in January to conspiracy to commit wire fraud and will be sentenced later this year.