Sigma-Aldrich, Inc., d/b/a MilliporeSigma (“MilliporeSigma”), a U.S. life sciences company based in Massachusetts, escaped criminal charges for export control violations, despite a former sales person’s scheme to illegally export products to China.  DOJ cited the favorable resolution as proof of the National Security Division’s commitment to its voluntary disclosure program.  MilliporeSigma was the first company to resolve an investigation for export control violations under DOJ/NSD’s voluntary disclosure policy.

DOJ cited MilliporeSigma’s “exceptional and proactive cooperation” after learning of the misconduct by a now-former employee.

From approximately 2016 to 2023, the MilliporeSigma salesperson conspired with others to divert fraudulently purchased MilliporeSigma products to the salesperson’s conspirators, who made false statements to agencies of the U.S. government related to the proposed export of products to China. The salesperson processed orders for the conspirators, who were not approved to purchase MilleporeSigma products by falsely reporting that the orders were being placed by individuals affiliated with a U.S. university stockroom, and thereby earned significant discounts and free shipping typically awarded to the university. The products included chemical compounds that MilliporeSigma determined were subject to federal export controls, including the International Traffic in Arms Regulations (“ITAR”), 22 CFR Parts 120-130, and Export Administration Regulations (“EAR”), 15 CFR Parts 730-774.

After being sent, a conspirator employed by the university diverted the products to other conspirators, who in turn repackaged the products, and then sent them to China.  To evade detection, the conspirators made false statements about the value and contents of the shipments to China in export documentation and paperwork.

DOJ declined to prosecute MilliporeSigma based on NSD’s Enforcement Policy for Business Organizations, and specifically cited the following factors:

• MilliporeSigma’s timely and voluntary self-disclosure of the misconduct, just a week after retaining outside counsel to conduct an internal investigation and before obtaining a complete understanding of the nature and full extent of the misconduct;
• MilliporeSigma’s exceptional and proactive cooperation, including by disclosing all known relevant facts about the misconduct and the individuals involved and identifying evidence establishing probable cause to search for evidence of the crimes in locations not under MilliporeSigma’s control, along with its agreement to continue to cooperate with any ongoing government investigations and any resultingprosecutions;
• the nature and seriousness of the offense, including that the chemical compounds exported to China through the scheme did not present a significant threat to national security in the quantities and concentrations sold and, in most instances, did not require a license for export;
• MilliporeSigma’s timely and appropriate remediation, including terminating the salesperson who engaged in the scheme and improving its internal controls and compliance program; and
• the fact that, although MilliporeSigma obtained some revenue from sales to the conspirators, MilliporeSigma was victimized by the conspirators’ scheme to fraudulently obtain significantly discounted products and free overnight shipping, which fraud was, under all of the circumstances, the most serious readily provable offense committed by the conspirators.

DOJ further determined that Millipore Sigma did not obtain any unlawful gains and therefore would not have to pay any disgorgement. 

MilliporeSigma agreed to continue to cooperate with the ongoing investigation.

DOJ touted the results of the investigation and the fact that MillipporeSigma earned a declination by voluntarily disclosing the conduct quickly after it learned about the employee’s wrongdoing.

Gregory Muñoz, 45, of Minneola, Florida, the former MilliporeSigma salesperson, and Pen Yu, also known as Ben Yu, 51, of Gibsonton, Florida, have both pled guilty to conspiracy to commit wire fraud in connection with the seven-year, nearly $5 million scheme, and are awaiting sentencing.

Muñoz helped Yu avoid scrutiny of his purchases of biochemical products — and garnered him a deep discount — by falsely claiming that Yu was affiliated with a research lab at a Florida university, according to the government.

In addition to the discounts, Muñoz provided free overnight shipping. In exchange, Yu gave Muñoz thousands of dollars’ worth of gift cards. Once the shipments arrived at the school, an accomplice would then hand them off to Yu, who would then ship them to China, misidentifying the contents in export documents.

In 2023, MilliporeSigma noticed some suspicious orders, leading the company to hire counsel and disclose what it knew even before the conclusion of its own investigation.