The United States Department of Justice (DOJ) recently announced that it would decline to prosecute Sigma-Aldrich, Inc., d/b/a MilliporeSigma, despite criminal wrongdoing committed by a MilliporeSigma employee. According to the DOJ, from roughly 2016 through 2023, Gregory Muñoz, a MilliporeSigma salesperson, conspired with others – including Ben Yu – to divert fraudulently purchased MilliporeSigma products to the conspirators, who made false statements to the United States government in connection with exporting the products to China.
Muñoz processed orders for Yu, who had not been approved to purchase MilliporeSigma products, by falsely representing that the orders were being placed by individuals affiliated with a U.S. university stockroom, thereby obtaining significant discounts and free overnight shipping that MilliporeSigma provided to the university. These products included chemical compounds that MilliporeSigma had determined were subject to federal export controls. When the orders arrived at the university stockroom, a conspirator employed by the university diverted them to Yu, who repackaged the product and shipped them to China. To avoid scrutiny, Yu made false statements in export documents regarding the value and contents of the shipments.
In total, Yu obtained nearly $5 million in discounts and other benefits from MilliporeSigma. In return, Yu gave Muñoz thousands of dollars in gift cards.
The scheme continued until compliance personnel with MilliporeSigma identified certain orders as suspicious, prompting the company to retain outside counsel. Outside counsel then voluntarily disclosed the misconduct to the National Security Division of the DOJ a week later, well before MilliporeSigma’s counsel completed their initial investigation and before they fully understood the nature and extent of the scheme. The DOJ also noted that 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.” Through that cooperation, investigators were able to quickly identify the conspirators involved.
We often see companies charged with criminal wrongdoing when employees perform criminal acts such as these. In this case, however, MilliporeSigma is avoiding prosecution – the first time that the National Security Division has declined to prosecute a company under its enforcement policy. Under the National Security Division Enforcement Policy for Business Organizations, a presumption is created 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.
“When MilliporeSigma found evidence that one of its employees was diverting biochemical products to an unauthorized purchaser in China, they did not sweep the misconduct under the rug. Instead, the company made the early decision to cooperate with the Justice Department, resulting in the convictions of responsible individuals,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today’s announcement reflects the value for companies like MilliporeSigma to quickly self-disclose potential criminal activity and reaffirms our commitment to work in partnership with the private sector to root out conduct that violates the law and jeopardizes our national security.”
Yu and Muñoz both pled guilty for their involvement in the scheme. The Information for Yu can be found here, while the Information for Muñoz is here.