Country-of-Origin Fraud in Defense Supplies: The Promise and the Production Record

Country of origin fraud in defense supplies conceals where goods or their components were made while claiming they meet a military contract’s sourcing requirements. The contradiction may sit between a domestic-origin certificate and the purchasing file, between a label and the factory that supplied the goods, or between a promise about U.S. manufacturing and work sent abroad. If you handle sourcing, production or contract sales, you may see the part of that transaction the government never sees. Taxpayers fund the purchase, military personnel use the goods, and domestic producers compete against suppliers making promises their factories cannot support. The factory and the certificate meet in Buy American Fraud in Defense Contracts: The Factory and the Certification Tell Different Stories.

What Is a Country of Origin?

Country of origin is where the goods, or the parts the contract covers, were made. A finished product’s manufacture, a textile’s production and a specialty metal’s melting location can answer different sourcing requirements.

A U.S. seller can buy from a foreign factory and supply a domestic prime contractor. The production and supplier records tell us where the goods came from. We connect those records to the representation used for the award, acceptance or payment.

What Are the Key Differences Between the Berry Amendment and the Buy American Act?

The Berry Amendment imposes domestic-source restrictions on specified food, clothing, textiles and other listed items purchased by the military. The Buy American Act generally favors domestic goods by looking at where they were made and the cost of their components.

Those differences reach the production floor. The Berry Amendment’s sourcing requirement can reach the textile used in a product, while the separate specialty-metals restriction concerns where a covered metal was melted or produced. We examine the actual contract and the exception claimed against the production step the supplier promised.

The Trade Agreements Act adds another sourcing promise: certain government purchases are limited to U.S.-made products or products made in designated countries. The load-out bag and toner cases below show how that promise reaches both warehouse labels and government sales listings.

Why a U.S. Prime Address Leaves So Much Unanswered

The Government Accountability Office’s review of the F-35 supply chain found that 114 of 115 active related defense contracts identified for fiscal years 2020 through 2024 listed U.S. country of origin. Those entries left unanswered where components and raw materials came from. We want to know which factory filled the order, because a domestic entry on a contract leaves too much of the production chain out of sight.

That is where a purchasing or supplier-quality employee’s knowledge matters. The prime sells to the government, subcontractors supply the prime, and other suppliers feed those subcontractors. Purchase orders, original-manufacturer authorizations and the reseller trail connect the company making the certification to the company making the component.

How False Origin Reaches Military Purchases

The cases show origin claims changing at different points: a foreign manufacturer’s tag replaced, a supplier certificate passed to a reseller, or a product left available on a government purchasing system. Each point connects an operational decision to something the government was told it could buy.

Foreign Tags Replaced With American Labels

London Bridge Trading agreed in 2023 to pay nearly $2.1 million to resolve allegations that its load-out bags violated the Trade Agreements Act and Berry Amendment. The Justice Department alleged that the company replaced foreign manufacturers’ tags with labels saying “Made in USA” while marketing foreign-made textile goods as American. In the alleged scheme, the label went away. The foreign manufacturing did not.

An employee brought the whistleblower case, and the Defense Criminal Investigative Service was among the agencies that investigated. A warehouse employee who saw relabeling could explain what happened to the manufacturer’s origin information before the government bought the goods.

Military Eyewear With Foreign Textile Components

Revision Military agreed in 2024 to pay $426,000 to resolve allegations involving protective eyewear systems sold through a Defense Logistics Agency program. That program required U.S.-sourced textile components under the Berry Amendment. The components at issue were carrying pouches, cases and straps.

According to the settlement announcement, Revision acknowledged the impermissible sales and that employees overseeing sourcing, operations or sales knew about the noncompliant components. The Department of the Army Criminal Investigation Division and the Defense Criminal Investigative Service provided investigative support. The product’s purchase description and the textile supplier’s records belong in the same examination.

Chinese Magnesium in Army Countermeasure Flares

Chinese magnesium in Army countermeasure flares was central to the government’s allegations against Kilgore Flares and its supplier ESM Group. The Army’s contracts prohibited foreign magnesium powder except Canadian powder to maintain domestic manufacturing capability. The flares use ultrafine magnesium powder to burn in a way that draws heat-seeking missiles away from aircraft.

The Justice Department alleged different conduct by the supplier and the flare manufacturer. ESM allegedly misrepresented the contents of Chinese magnesium imports to avoid antidumping duties. Kilgore allegedly used that powder in Army flares despite domestic-source requirements and engineering specifications. Kilgore agreed to pay $6 million and ESM $2 million to resolve those civil allegations.

The customs declaration and the Army contract carried separate promises about the same material. Reade Manufacturing Company, a domestic magnesium producer, brought the whistleblower case against ESM. The U.S. Army Criminal Investigation Command and the Defense Criminal Investigative Service were among the agencies involved in the resolution. A business competing to supply the powder had a direct stake in whether its rival followed the purchasing and import rules.

FMF Orders for Israel, Chinese Tungsten and a Mexican Factory

Tungsten Heavy Powder, an FMF supplier, agreed to a $5,641,114 civil settlement in 2021 over allegations that it falsely certified domestic tungsten components. The Justice Department’s account concerned seven Israeli purchase orders financed by U.S. grant funds through the Foreign Military Financing program.

The government alleged that Tungsten Heavy Powder certified U.S. sourcing for tungsten obtained in China and U.S. manufacturing for work contracted to a Mexican maquiladora. The supplier’s certification connected the raw material and the factory to American financing even though Israel placed the orders.

A former employee and Global Tungsten & Powders Corporation brought the whistleblower case. The announcement said they would receive 17 percent of the settlement proceeds. The U.S. Attorney’s Office investigated in coordination with the Defense Criminal Investigative Service, U.S. Army Criminal Investigation Division Command and Defense Security Cooperation Agency.

Scientific Instruments and Prosthetic Components

Instec and its owner agreed to pay $625,000 in 2022 to resolve allegations that scientific instruments manufactured in China were falsely certified as domestic. The customers included the Navy and Army. A former employee brought the case.

Ossur Americas paid $500,000 in 2014 to resolve allegations that it supplied the Army with foreign-made prosthetic, bracing and support products while certifying U.S. manufacture. Its Army contracts expressly required Buy American compliance. The goods included prosthetic components for wounded soldiers. The Defense Criminal Investigative Service investigated the matter.

Toner Still for Sale After Removal Instructions

OMNI Business Systems agreed to pay $80,944 in 2023 to settle allegations that it falsely offered more than a dozen toner products as Trade Agreements Act compliant. The sales channels included a General Services Administration schedule and an Air Force blanket purchase agreement. A competitor brought the whistleblower case.

The government alleged that OMNI kept the products available and made sales after being told to remove the noncompliant items. The General Services Administration’s Office of Inspector General and the Air Force Office of Special Investigations helped obtain the resolution. For a catalog employee, the removal instruction and the sales that followed could show who knew the origin claim was wrong.

A Domestic Certificate Passed Through a Reseller

Raytheon Technologies paid $515,625 to resolve allegations involving Romanian-manufactured goods certified as domestic under contracts with domestic-preference requirements. The settlement also covered its subsidiary Hamilton Sundstrand. The government alleged that false certifications accompanied both direct government sales and sales through a third-party supplier, tying the certifications and invoices to claims for payment.

The Defense Criminal Investigative Service, the U.S. Air Force Office of Special Investigations and the Naval Criminal Investigative Service investigated. For someone supplying a prime or distributor, the origin claim can sit in the certificate sent to that customer. We follow it through to the government purchase.

How to Prove Country of Origin?

We establish country of origin by connecting the contract’s sourcing promise to manufacturing records, supplier files, purchase orders, certificates and labels. A metal’s melt record concerns a different production step from the final assembly of an item containing it.

We examine the contract and its changes alongside the particular product, supplier and production records. The acceptance record, invoice or financing certification then connects the origin promise to government money. Import records can expose another description of the same material, as the magnesium allegations show.

Instructions and acknowledgments make the business’s knowledge concrete. OMNI’s alleged continued sales after removal instructions and Revision’s acknowledgment of employees’ sourcing knowledge show why we look beyond the certificate itself. The people deciding what to buy, what to label and what to keep selling can explain how the contradiction reached the government.

Can a Country-of-Origin Case Pay a Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The origin cases above include employees and competing suppliers who connected their knowledge to government purchases or financing. We work with you to connect what you saw inside the business to what the government paid for.

When You Know Where It Was Made

If the supplier file, factory work or original label contradicts what your company promised the military, speak with our whistleblower experts about the origin claim. We work beside you to build your strongest case around the production history, the people who knew it and the government money it reached. We find the defense sourcing whistleblower lawyers suited to your case and stay beside you from first call to resolution.