A 51-year-old man of Taiwanese descent, Pen Yu (also known as Ben Yu), residing in Florida, was sentenced to three years and eight months in prison on Friday, August 2, for conspiring to commit telecommunications fraud, along with three years of supervised release.
According to a statement released on the U.S. Department of Justice website, as part of the sentencing, the court also ordered the forfeiture of $100,000 in proceeds from the telegraphic fraud.
The Department of Justice stated that Florida man Pen Yu pleaded guilty on May 2, his co-conspirator Gregory Muñoz pleaded guilty on May 9, and Jonathan Thyng pleaded guilty on July 23.
Court documents revealed that starting from at least July 2016 until at least May 2023, Yu, with the assistance of salesperson Muñoz from MilliporeSigma, placed orders for biochemical products by falsely claiming to be affiliated with a large university’s biology research laboratory in Florida.
MilliporeSigma is a subsidiary of the multinational technology company Merck KGaA.
This fictitious affiliation led MilliporeSigma to provide Yu with discounts and other benefits valued at over $4.9 million, which were not accessible to the public. Yu gifted Muñoz with thousands of dollars in gift cards in exchange for these fraudulent discounted orders.
According to the Department of Justice, when the products arrived at the university’s warehouse, a warehouse employee transferred the products to Yu, who then repackaged and shipped them to China. To avoid scrutiny, Yu made false statements about the value and content of these goods in export documents.
This illegal activity continued until compliance personnel at MilliporeSigma identified certain orders as suspicious, leading the company to hire external counsel. Just a week later, the external counsel voluntarily disclosed this misconduct to the National Security Division of the Justice Department before completing their investigation and understanding the full nature and scope of the case.
The Department of Justice stated that MilliporeSigma provided outstanding cooperation to the prosecution team, including proactively confirming and providing documents to the department. These documents provided legitimate reasons to search the suspect’s residence and electronic devices, enabling investigators to swiftly identify those responsible for the case and prompt them to plead guilty.
Assistant Attorney General Matthew S. Axelrod, responsible for export enforcement at the Department of Justice, stated in a document on May 22, “Falsifying connections with academic research laboratories to obtain controlled biochemical materials, and then shipping those materials to China, is not only wrong but illegal.”
“Today’s announcement provides another cautionary tale for universities—external individuals abusing academic institutions, attempting to obscure the actual customers of controlled items.”