ROCHESTER, N.Y. — Arkady Malakhov, 52, of New York City, has pleaded guilty to unlawfully converting government funds, admitting to misusing $200,000 from a federal Small Business Innovation Research (SBIR) grant awarded by the National Science Foundation (NSF), prosecutors announced Monday.
Malakhov, the former CEO of Solid Cell, Inc., secured the $225,000 SBIR grant in July 2017 to support a project titled “Integrated Thermoelectric Heat Exchanger for Carbon Neutral Electricity Production.” The grant was intended to fund research on recovering cold energy from the regasification of liquefied natural gas (LNG).
According to prosecutors, Malakhov requested two $100,000 disbursements from the grant funding in July 2017, which were deposited into a company bank account under his control. Malakhov diverted portions of both payments for his personal use and for other unauthorized purposes unrelated to the federally funded project.
The National Science Foundation Office of Inspector General and the Department of Energy Office of Inspector General conducted the investigation. U.S. Attorney Trini E. Ross commended the agencies for their work in uncovering the misuse of government funds.
Malakhov faces a maximum penalty of one year in prison and a fine of up to $100,000. Sentencing is scheduled for April 22, 2025, before U.S. District Judge John L. Sinatra, Jr.