Arkady Malakhov, 52, of New York, NY, pleaded guilty on November 27 before U.S. District Judge John L. Sinatra, Jr. to charges related to the unlawful conversion of government money. The charge carries a maximum penalty of one year in prison and a $100,000 fine, according to the U.S. Attorney’s Office for the Western District of New York.
Malakhov, the CEO of Solid Cell, Inc., a small business in Rochester, New York, had submitted a proposal in December 2016 for a Small Business Innovation Research (SBIR) grant from the National Science Foundation (NSF). The project, titled “SBIR Phase I: Integrated Thermoelectric Heat Exchanger (iTEG-HX) for Carbon Neutral Electricity Production through Recovery of Cold Energy from Regasification of LNG,” was awarded a $225,000 grant by the NSF in July 2017.
Shortly after receiving the grant, Malakhov requested and received an initial payment of $100,000 from the NSF, which he transferred to a bank account under his control. However, Malakhov misused a portion of the funds for personal purposes and sent some to other parties for unrelated uses.
Malakhov requested a second $100,000 payment from the grant later that same month, which was again transferred to his account. Once again, he misappropriated part of the funds for his personal use and directed others to use the money for non-project-related purposes, despite knowing he had no authority to do so.
Malakhov’s guilty plea concludes the case, which highlights the misuse of government grant funds meant for innovation and research.
