Thousands of N95 masks the City of Houston purchased earlier this year turned out to be counterfeit.
Houston police are investigating the company, Med-Tech Resources LLC, for felony trademark counterfeiting.
"After the masks were delivered, 3M and the city determined they were counterfeit, the documents said...
A city employee grew suspicious after hearing many masks on the market were counterfeit. A police report included in the court documents said the masks in question were quarantined and never used."
More disturbing is that even after the masks were determined to be fake, the City of Houston sent the company a payment of more than $700,000.
The Houston Chronicle reports:
“Jerry Adams, the city’s chief procurement officer, called Med-Tech on Feb. 1, and told the company the city would not pay the outstanding balance or accept the remaining 350,000 masks, according to the police report. Adams said the owner of the company, Mike Modrich, offered to take back any deceptive masks and refund the city.
A day later, however, the city sent Med-Tech another payment of $774,836, though it later was able to stop that transfer after contacting the bank.It is unclear why the city sent another payment after learning the masks were counterfeit.”
In addition, the city paid more than double the price for the fake N95 masks:
“The city also may have overpaid for the masks. The city purchased them at an average price of $2.71 per mask, more than double the manufacturer’s maximum price, prosecutors wrote in their court filing. In the police report, Adams said other vendors who submitted bids could not provide the masks.
“However, because of the scarcity of the 3M 1860 mask, the city of Houston purchased masks from (Med-Tech) because they were the only vendor who could fulfill the city’s order,” the police report said.”
On the show this morning, the Czar said he believes there’s more to this story and that someone at City Hall may have been getting kickbacks from the Med-Tech company.