The Department of Justice (DOJ) declined to prosecute Massachusetts-based biochemical company MilliporeSigma for its “extraordinary cooperation” in uncovering a “rogue” employee’s scheme to procure and ship discounted products to China using falsified export documents.
Gregory Muñoz, a MilliporeSigma salesperson, and his accomplice, Ben Yu, pleaded guilty to one count each of wire fraud conspiracy for their roles in the scheme, the DOJ announced in a press release Wednesday.
The declination is the first by the DOJ’s National Security Division, the agency noted. MilliporeSigma voluntary self-disclosed the matter.
The details: From at least July 2016 to May 2023, Yu ordered biochemical products from MilliporeSigma, a subsidiary of Merck, by falsely representing he was affiliated with a biology research lab at a large Florida university.
The bogus affiliation led MilliporeSigma to provide Yu with more than $4.9 million in discounts and other benefits, like free overnight shipping, that were not available to the public, the DOJ said.
Yu paid Muñoz thousands of dollars in gift cards for facilitating these fraudulent discounted orders.
When the products arrived, a university stockroom employee diverted the products to Yu, who repackaged them with falsified export documents and shipped them to China, per the DOJ.
Compliance considerations: The scheme continued until MilliporeSigma’s compliance personnel identified certain orders as suspicious, which prompted the company to retain outside counsel who voluntarily disclosed the misconduct a week later, the DOJ said.
The agency lauded MilliporeSigma for “proactively identifying and producing documents to the department that established probable cause to search residences and electronic devices of culpable individuals,” which allowed the DOJ to quickly identify individuals responsible, including Yu and Muñoz.
In its declination letter, the DOJ highlighted MilliporeSigma’s “timely and appropriate remediation, including terminating the salesperson who engaged in the scheme and improving its internal controls and compliance 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 China, and the company will not be prosecuted,” said Deputy Attorney General Lisa Monaco in the release.
Company response: In an emailed statement, MilliporeSigma said the “DOJ’s favorable resolution of this matter … reflects our company values and steadfast commitment to a strong culture of compliance that protects our customers, employees, and business.”
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