Taiwanese National Sentenced to 3 Years in Prison for Exporting Biochemicals to China

The Department of Justice building in Washington on June 20, 2023. Kevin Dietsch/Getty Images

A Taiwanese national living in Florida was sentenced to three years and eight months in prison for defrauding a biochemical company and exporting its products, including cholera and pertussis proteins, to China, the Department of Justice (DOJ) announced on Aug. 2.

Pen Yu, 51, from Gibsonton, Florida, pleaded guilty to conspiracy to commit wire fraud in May. He was also sentenced to three years of supervised release and ordered to forfeit $100,000 from the wire fraud proceeds.

According to court documents, Yu, who is also a U.S. citizen, fraudulently purchased biochemical products from MilliporeSigma—a subsidiary of Germany-based science and technology company Merck KGaA—between July 2016 and May 2023 with help from co-conspirator Gregory Munoz, a MilliporeSigma salesperson from Florida.

With Munoz’s help, Yu was able to falsely present himself as someone affiliated with a biology research lab at a Florida university, allowing him to obtain more than $4.9 million in discounts and benefits from MilliporeSigma, according to the DOJ.

These benefits included free overnight shipping and were not available to the public. Yu also gave Munoz thousands of dollars in gift cards to facilitate the fraudulent discounted purchase orders, according to court documents.

To deceive the company, Yu and Munoz allegedly used the email addresses and names of two researchers who had already left the university to place orders without their knowledge or authorization.

The two defendants also paid a Chinese national and a university student, both unnamed in court documents, to use their university emails to place orders with MilliporeSigma, court documents state.

When the purchased products arrived at the university’s stockroom, a stockroom employee diverted them to Yu, who then repackaged and shipped the products to China using falsified documents. These packages contained the analytical standards of cocaine, fentanyl, morphine, MDMA, amphetamine, methamphetamine, oxycodone, codeine, and ketamine.

Cholera, Pertussis Toxins

Prosecutors said the biochemical products Yu illegally shipped to China included “PNP [purified noncontagious proteins] of the cholera toxin and pertussis toxin.”

The pertussis toxin causes whooping cough. Cholera toxin is a bacterial protein that causes severe diarrhea and dehydration associated with cholera infection, according to the National Institutes of Health.

On June 12, 2020, for example, Yu asked Munoz via email if he could get 10 units of cholera toxin for his “boss,” despite knowing that they were Drug Enforcement Administration-regulated items, according to court documents.

That same day, Munoz responded, “This is the Cholera Toxin. Remember we had issues in the past and they require a lot of documentation signed by the University.”

On March 27, 2023, another order, placed through the university stockroom, included the PNP of cholera and pertussis toxins.

The DOJ stated that Yu falsified the value and contents of the shipments in the export documents by claiming that the packages sent to China contained “diluting agents.”

The stockroom employee was not named in court documents and was identified only as a U.S. citizen residing in Gainesville, Florida.

The scheme was discovered when MilliporeSigma compliance personnel identified suspicious orders and prompted the company to retain outside counsel, who later reported it to the DOJ’s National Security Division.

Co-conspirators in China

The DOJ stated that Yu was paid more than $100,000 by his “one or more co-conspirators” in China for his efforts in the scheme. In emails sent to Munoz, Yu referred to a co-conspirator in China as his “boss.”

Munoz allegedly benefitted from the scheme through the increased bonuses from the company and gift cards from Yu, all of which totaled more than $100,000.

The DOJ stated that it won’t bring charges against MilliporeSigma because of the company’s “exceptional cooperation” with prosecutors, including by proactively identifying and producing documents related to the case.

“MilliporeSigma made the disclosure well before its counsel had completed their investigation and understood the full nature and extent of the scheme,” it said in a statement.

Munoz and Jonathan Thyng, another co-conspirator, pleaded guilty to conspiracy to commit wire fraud in May and July, respectively. The DOJ did not specify Thyng’s role in the scheme or when sentencing for the alleged co-conspirators is expected.

Frank Fang contributed to this report.