On September 13, 2016, a federal grand jury in Greeneville returned an indictment against Vincent Lee Ferguson, 65, of Knoxville, Tenn.; Matthew Lee Ferguson, 40, of Lenoir City, Tenn.; Kerry Joseph Ferguson, 35, of Houston, Texas; Matthew Harrison Martland, 32, of Knoxville, Tenn.; and Stephanie Lynn Kaemmerer, 44, of Knoxville, Tenn., for wire fraud, conspiracy to commit wire fraud, major fraud against the United States, and smuggling goods into the United States.
They are former employees of Wellco Enterprises, a now defunct footwear manufacturer which sold boots to the US military. Vincent Ferguson was president and CEO from 2006 to 2012, Matthew Ferguson was senior vice president of sales, Kerry Ferguson was marketing director, Matthew Martland was director of distribution and logistics and Stephanie Kaemmerer was inside sales manager and operations manager at Wellco.
Wellco had a rich history in military footwear for over half a century. In fact, their Rosearch business unit held the IP for several direct molded sole systems including the Jungle Boot’s Panama sole and the legendary footprint sole developed experimentally for MACV SOG’s cross border operations. Wellco was bundled with Altama and sold out of Ch 11 bankruptcy to Original SWAT in 2014 to form Original Footwear.
Investigations by Homeland Security, the Defense Criminal Investigative Service, Air Force Office of Special Investigation, General Services Administration Office of Inspector General, and the Defense Contracts Audit Agency found that Wellco substituted Berry compliant boots with those Made in China in order collect a larger profit from the sale of the boots to the military as well as others, including the public.
If convicted, they all face a term of 20 years in prison as to each wire fraud charge and smuggling charge, and up to 10 years in prison for the charge of major fraud against the United States. Additionally, they face fines of up to $250,000 and up to three years of supervised release as to each count. The indictment also seeks forfeiture of approximately $8.1 million.
