Arkady Malakhov, 52, of New York City, admitted to squandering $200,000 from a federal Small Business Innovation Research (SBIR) grant given by the National Science Foundation (NSF) and entered a guilty plea to fraudulently converting government funds, according to prosecutors’ announcement on Monday.
The $225,000 SBIR award was obtained in July 2017 by Malakhov, the former CEO of Solid Cell, Inc., to support a project called Integrated Thermoelectric Heat Exchanger for Carbon Neutral Electricity Production. The primary goal of the funding was to support studies on cold energy recovery from LNG regasification.
Prosecutors claim that in July 2017, Malakhov asked for two $100,000 payouts from the grant funds, which were sent to a business bank account that he controlled. Malakhov misused parts of both payments for his own benefit and for other illegal uses unconnected to the project that was supported by the federal government.
The investigation was carried out by the Office of Inspector General at the Department of Energy and the Office of Inspector General at the National Science Foundation. The agencies’ efforts to expose the misappropriation of public funds were praised by U.S. Attorney Trini E. Ross.
Malakhov could be fined up to $100,000 and imprisoned for up to a year. On April 22, 2025, U.S. District Judge John L. Sinatra, Jr. will preside over the sentencing hearing.
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