The Giants originally signed Mercedes out of the Dominican Prospect LeagueJanuary for $400K. When they tried to get the contract approved by MLB, they informed the Gaints in March of 2011 that Mercedes would be placed on suspension and the contract would be temporarily voided while they investigated Mercedes for having used a fake name and age during the 2009 - 2010 time-frame.
For some reason the investigation took a lot more time than past cases of misrepresentation by Caribbean prospects. The thing that was most strange about the whole affair is that Mercedes had already come clean about his true name and true age when he was signed up for, and started playing in the DPL, near the end of 2010. He had been using the name Jeffery Tapia (who was about 2 years younger than Mercedes) at one time, but when he was pitching in the DPL in 2010 and 2011 he was using his real name and real age. When the Giants signed him in January 2011 they already knew his real name and real age, and the info that he had been previously playing under an assumed name was available to the public in both the USA and the D.R. - although it wasn't widely publicized and the details were still hazy.
The puzzling thing to me about the whole affair is that the Giants knew his correct age and his correct name when they signed him for $400K, so there can't be any claim that Mercedes mislead or defrauded the Giants. They stood by Mercedes through much of the 2011 baseball season, but then informed Mercedes that they no longer wanted him in their system sometime around the end of November or beginning of December. Mercedes's rep posted several times this past December that Simon was willing to honor the original $400K contract or even sign for significantly less if the Giants wanted to renegotiate, but the Giants had informed him that there was no money left in the budget for Mercedes. The Giants told him that they had spent the $400K on other guys in the meantime.
At the time all this info was becoming public, I commented that it seemed a dumb decision by Sabes & Co. given the fact that MLB had already ruled that Mercedes would be eligible to sign a new contract in March (and thus be available to play the entire 2012 season) and Mercedes seemed desperate to reach a deal with the Giants even at a reduced price, and given the fact that Mercedes's age and stuff still made him a top prospect. Now that the Red Sox have shown that they think Mercedes is worth $800K seems to me to show that Sabes has made another bad offseason decision based solely on money (in this case as little as $300-400K).