Arkady Malakhov, 52, of New York, NY, pleaded guilty on November 27 before U.S. District Judge John L. Sinatra Jr. to charges of converting and unlawfully conveying government funds. These charges carry a maximum penalty of one year in prison and a fine of up to $100,000, according to the U.S. Attorney’s Office for the Western District of New York.
Malakhov, who served as the CEO of Solid Cell, Inc., a small business based in Rochester, New York, submitted a proposal to the National Science Foundation (NSF) in December 2016. The proposal was for a Small Business Innovation Research (SBIR) grant, titled “SBIR Phase I: Integrated Thermoelectric Heat Exchanger (iTEG-HX) for Carbon Neutral Electricity Production through Recovery of Cold Energy from Regasification of LNG.”
In July 2017, Solid Cell, Inc. was awarded a $225,000 SBIR grant by the NSF to fund the project. The same month, Malakhov requested an initial payment of $100,000, which was transferred into an account controlled by him. However, Malakhov misused part of the grant money for personal expenses and transferred some of the funds to unrelated parties.
Later that month, Malakhov requested an additional $100,000 of the grant funds, which was again deposited into his account. As before, he misappropriated a portion of the money for personal use and directed some funds to other parties for unrelated purposes, despite knowing he lacked the authority to do so.
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