Are US companies selling Chinese products to US government which they say are made in America?

In August of this year, former defense contractor from Tennessee was setenced 41 months in federal prison for selling Chinese boots to the military withfraudulent “Made in the USA” labels. Vincent Lee Ferguson, the former president of Wellco Enterprises, pleaded guilty to his part in the fraud conspiracy, according to a U.S. Department of Justice news release. Wellco’s former Senior Vice President of Sales, Matthew Lee Ferguson, 41, of Geneva, Illinois, and former Director of Marketing and Communications, Kerry Joseph Ferguson, 36, of Houston, Texas, were sentenced in June 2018 to each serve six months in federal prison for the same crime.Wellco was a major manufacturer and supplier of military footwear to the U.S. Department of Defense (DoD) and to civilian customers. Over several years, the Department of Defense paid over $138 million to Wellco for the supply of combat boots.   According to the indictment, Wellco deceptively sold sell those boots to DoD, government contractors, and the general public as “Made in the USA” and as compliant with the Berry Amendment and the Trade Agreements Act (TAA).

Wellco required the Chinese manufacturer acility to include “USA” on labels of boot uppers. Two shipments of these deceptively marked boots were seized by the U.S. Department of Homeland Security’s Customs and Border Protection.

These activities violated the federal Berry Amendment, which bars the Defense Department from buying foreign-made clothing.  The Berry Amendment states that the Department of Defense may not purchase any food, clothing and materials used to make clothing, tents and other goods that were not produced in the United States. Representing foreign made goods as American made qualifies as a False Claims Act violation as the vendor certifies that the products conform with all contract provisions.