Guilty Plea in Product Substitution Case

Granite Bay is an unincorporated area northeast of Sacramento California located along the north shore of Folsom Lake. It began as Granite Bar when gold miners first settled the banks of the American River. At its peak, there was 37 gold mines along both sides of the river.

Granite Bay (formerly Granite Bar) has a long and unique history. Besides the gold found there, it happened to be located along the supply line that was used to bring goods to the gold miners and carry gold nuggets to the banks in San Francisco. It was also a place for bandits to hang out - laying in wait to relieve travelers of their belongings. One brazen and famous robber along the stretch was known as "Rattlesnake Dick", so named, not because he was sneaky but because he was once an honest gold miner upriver at Rattlesnake Bar before turning outlaw.

Granite Bay is still home to thieves. The Justice Department just announced a guilty plea by a Granite Bay man accused of product substitution fraud. The scope of his fraud would probably leave Rattlesnake Dick jealous however. Between 2011 and 2017, Mr Meron used two office supply businesses he operated to defraud federal government agencies out of $3.5 million. He did this by substituting and delivering cheaper, generic versions of expensive, name-brand products his customers ordered, and pocketing the price difference.

Meron's two companies contracted to sell office supplies to federal agencies through two web-based government sales portals; GSA Advantage and DoD EMall. After Meron received payments for the premium products his customers ordered, he obtained compatible products from his suppliers that cost him a fraction of what his customers paid for the brand-name products they ordered. Meron then substituted and delivered those cheaper products for the more expensive products and retained the difference in cost. Over time, Meron extended his substitution scheme to nearly all orders for those name-brand products, and never intended to deliver what his customers ordered.

The use of knockoff products is significant because the United States Trade Trade Agreement Act requires federal agencies to buy products made or designed in the US. It bans federal agencies from buying products made in China. Meron's suppliers used cheaper products made in China.