U.S. Attorney Trini E. Ross announced that Arkady Malakhov, 52, from New York, NY, has pleaded guilty to charges of conversion and unlawful conveying of government money. This charge carries a maximum penalty of one year in prison and a fine of $100,000.
Assistant U.S. Attorney Katelyn M. Hartford, who is handling the case, detailed that Malakhov became Chief Executive Officer of Solid Cell, Inc., a small business based in Rochester, NY, in 2006. In December 2016, Malakhov submitted a proposal to the National Science Foundation (NSF) for a Small Business Innovation Research (SBIR) grant. The project was titled “SBIR Phase I: Integrated Thermoelectric Heat Exchanger (iTEG-HX) for Carbon Neutral Electricity Production through Recovery of Cold Energy from Regasification of LNG.” By July 2017, NSF awarded Solid Cell, Inc., a $225,000 SBIR grant to support this project.
That same month, Malakhov requested an initial payment of $100,000 from the grant funds. NSF transferred this amount to Solid Cell’s bank account under Malakhov's control. It was revealed that Malakhov misused part of these funds for personal use and conveyed some to other parties for purposes unrelated to the project. Later in July 2017, he requested another $100,000 from the grant funding which was again deposited into his controlled account. He repeated his previous actions by converting part of this sum for personal use and unrelated purposes.
The investigation leading to Malakhov's plea was conducted by the National Science Foundation Office of Inspector General under Inspector General Allison Lerner and the Department of Energy Office of Inspector General led by Inspector General Teri L. Donaldson.
Sentencing is set for April 22, 2025, at 2:00 p.m., before Judge Geraci.