Ringleader and Company Insider Plead Guilty to Defrauding
Biochemical Company and Diverting Products to
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Through Company’s Prompt Disclosure of Misconduct and
Extraordinary Cooperation, National Security Division Announces First
Declination to Prosecute Company Under Enforcement Policy
The Justice Department today announced that Pen Yu, also
known as Ben Yu, 51, of Gibsonton, Florida, and Gregory Muñoz, 45, of Minneola,
Florida, have each pleaded guilty to one count of wire fraud conspiracy for
their roles in a scheme to fraudulently procure deeply discounted products from
Massachusetts biochemical company Sigma-Aldrich Inc., doing business as
MilliporeSigma, and export them to China using falsified export documents.
In addition, the Justice Department announced that it has
declined the prosecution of MilliporeSigma after considering the factors set
forth in the Department’s Principles of Federal Prosecution of Business
Organizations and the National Security Division Enforcement Policy for
Business Organizations (NSD Enforcement Policy). The NSD Enforcement Policy
creates a presumption that companies that (1) voluntarily self-disclose to NSD
potentially criminal violations arising out of or relating to the enforcement
of export control or sanctions laws, (2) fully cooperate, and (3) timely and
appropriately remediate will generally receive a non-prosecution agreement,
unless aggravating factors are present. This is the first time that NSD has
declined the prosecution of a company under the NSD Enforcement Policy.
“When a business uncovers criminal wrongdoing within its
ranks, the company is far better off reporting the violation than waiting for
the Justice Department to discover it,” said Deputy Attorney General Lisa
Monaco. “That’s exactly what MilliporeSigma did in the first-ever corporate
declination under our National Security Division’s voluntary self-disclosure
program. Because of MilliporeSigma’s timely disclosure and exceptional
cooperation, a rogue company insider and his accomplice pled guilty to
fraudulently diverting millions of dollars worth of biochemicals to
“When MilliporeSigma found evidence that one of its employees
was diverting biochemical products to an unauthorized purchaser in
“When company and university insiders abuse the trust that
their institutions place in them, they will be held accountable,” said
“Faking an affiliation with an academic research lab to
obtain controlled biochemical materials, and then sending those materials to
China, is not only wrong, but illegal,” said Assistant Secretary for Export
Enforcement Matthew S. Axelrod. “Today’s announcement provides yet another fact
pattern for universities to beware of — the misuse of academic institutions by
outsiders who seek to obscure the actual customer of controlled items.”
According to court documents, beginning in at least July
2016 and continuing through at least May 2023, Yu ordered biochemical products
from MilliporeSigma, a subsidiary of multinational science and technology
company Merck KGaA, Darmstadt, Germany, with help from Muñoz, a MilliporeSigma
salesperson, by falsely representing that Yu was affiliated with a biology
research lab at a large Florida university. This fictitious affiliation led
MilliporeSigma to provide Yu over $4.9 million worth of discounts and other
benefits, such as free overnight shipping, not available to the public. Yu gave
Muñoz thousands of dollars in gift cards for facilitating these fraudulent
discounted orders. When the products arrived at the university stockroom, a
stockroom employee diverted the products to Yu, who repackaged them and shipped
them to
This scheme continued until MilliporeSigma compliance
personnel identified certain orders as suspicious, prompting the company to
retain outside counsel who voluntarily disclosed the misconduct to the
Department of Justice’s National Security Division only a week later.
MilliporeSigma made the disclosure well before its counsel had completed their
investigation and understood the full nature and extent of the scheme.
MilliporeSigma offered exceptional cooperation to the prosecution team,
including by proactively identifying and producing documents to the Department
that established probable cause to search residences and electronic devices of
culpable individuals. MilliporeSigma’s cooperation allowed investigators to
quickly identify the individuals responsible for the scheme, including Yu and
Muñoz, and secure their felony guilty pleas. As a result of MilliporeSigma’s
timely self-disclosure and extraordinary cooperation, MilliporeSigma will not
be charged, despite the criminal wrongdoing committed by Muñoz, a
MilliporeSigma employee.
The Defense Criminal Investigative Service; Department of
Commerce, Bureau of Industry and Security; and Homeland Security Investigations
are investigating the case.
Assistant U.S. Attorney Daniel J. Marcet for the Middle
District of Florida and Trial Attorney Garrett Coyle of the National Security
Division’s Counterintelligence and Export Control Section are prosecuting the
cases.