Merck KGaA’s subsidiary MilliporeSigma has evaded charges from the US Department of Justice after exposing an alleged eight-year scheme by a former employee and his accomplice to illegally ship biochemicals, such as cocaine and methamphetamine, to China.
Two men, Pen Yu, 51, and Gregory Muñoz, 45 and a former MilliporeSigma salesman, have pleaded guilty to one count of wire fraud conspiracy after procuring $4.5 million-worth of products from chemical company Sigma-Aldrich, a subsidiary of Merck KGaA, and diverting them to China using false export documents. Muñoz was fired in May 2023, a MilliporeSigma spokesperson told Endpoints News.
According to court documents, biochemicals that were shipped included cocaine, morphine, methamphetamine and oxycodone, but were labeled as “diluting agents” on export documents. Once the drug products reached China, they were then sold to Chinese laboratories for profit.
This is the first time the DOJ has not prosecuted a company under its enforcement policy, as Merck KGaA quickly provided evidence of the scheme and showed “extraordinary cooperation,” according to a DOJ press release on Wednesday.
“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 in the press release.
For nearly eight years between July 2016 and May 2023, Yu, with the help of Muñoz, pretended to be from a biology research lab at a university in northern Florida by impersonating previous university employees with names and email addresses, according to court documents. The university was a part of Muñoz’s sales area, which induced other universities in Florida.
Yu managed to order over $4.5 million-worth of discounted biochemical products, with benefits such as free shipping, from MilliporeSigma. Once the products arrived at the university, a stockroom employee co-conspirator sent them to Yu who shipped the drugs to China with falsified export documents.
In return, Yu sent Muñoz gift cards worth thousands of dollars. There were three other co-conspirators involved in the scheme, according to court documents. The scheme was eventually caught by MilliporeSigma’s compliance personnel who noticed certain orders appeared suspicious, according to the DOJ.
“The DOJ’s favourable resolution of this matter with MilliporeSigma reflects our Company values and steadfast commitment to a strong culture of compliance that protects our customers, employees, and business,” the MilliporeSigma spokesperson told Endpoints.