This quote sounds like something Sinclair Lewis might have said or written, but we've never been able to find this exact quote. Here are passages from two novels Lewis wrote that are similar to the quote attributed to him.
From It Can't Happen Here: "But he saw too that in America the struggle was befogged by the fact that the worst Fascists were they who disowned the word 'Fascism' and preached enslavement to Capitalism under the style of Constitutional and Traditional Native American Liberty."
From Gideon Planish: "I just wish people wouldn't quote Lincoln or the Bible, or hang out the flag or the cross, to cover up something that belongs more to the bank-book and the three golden balls."
There was also a play by Sherman Yellen called Strangers in the late 1970s which had a similar quote, but no one, including one of Lewis’s biographers, Richard Lingeman, has ever been able to locate the original citation.
Other variants include one from James Waterman Wise, Jr. in the Christian Century (Feb.5, 1936) who noted that Hearst and Coughlin were the two chief exponents of fascism in America. If fascism comes, he added, it will not be identified with any "shirt" movement, nor with an "insignia," but it will probably be "wrapped up in the American flag and heralded as a plea for liberty and preservation of the constitution" (245).Another version isfrom Halford E. Luccock, in Keeping Life Out of Confusion (1938): "When and if fascism comes to America it will not be labeled 'made in Germany'; it will not be marked with a swastika; it will not even be called fascism; it will be called, of course, 'Americanism.'" Harrison Evans Salisbury in The Many Americas Shall Be One (1971) remarked "Sinclair Lewis aptly predicted in It Can't Happen Here that if fascism came to America it would come wrapped in the flag and whistling 'The Star Spangled Banner'" (29).