Former CEO pleads guilty to embezzling $200,000 in federal research grant funds

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ROCHESTER, NY – Arkady Malakhov, 52, of New York City, pleaded guilty to illegally converting government funds and admitted to improperly using $200,000 of a federal Small Business Innovation Research (SBIR) grant awarded by the National Science Foundation (NSF), prosecutors announced. Monday.

Malakhov, former CEO of Solid Cell, Inc., was awarded 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 into cold energy recovery from liquefied natural gas (LNG) regasification.

According to prosecutors, Malakhov requested two disbursements of $100,000 from the grant 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’s Office of Inspector General and the Department of Energy’s Office of Inspector General conducted the investigation. United States Attorney Trini E. Ross praised the agencies for their work in uncovering 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.