On Thursday, it was announced that the CFO of a New Haven biotech firm has been charged with embezzling nearly $1 million from a company that receives federal research grants. 48-year-old Thomas Malone of New Haven was arrested Thursday on a criminal complaint. The defendant appeared before United States Magistrate Judge Sarah A. L. Merriam and was released on a $50,000 bond.
Court documents allege that Malone served as the chief financial officer of Artificial Cell Technologies Inc. The small biotech company works on developing better ways to deliver malaria and respiratory syncytial virus vaccines to impacted populations. ACT receives funding from private investors and it received roughly $4.1 million in grants from the National Institutes of Health since 2008.
As CFO, the defendant was responsible for collecting, posting and depositing grant and investor funds. He was also responsible for tracking and reporting grant expenditures, managing accounts payable and cash disbursements, and facilitating payroll. It is alleged that in November of 2016, the company’s chief executive officer discovered that Malone had been paying himself roughly $660,000 in annual salary, which is far above the approximate $281,000 salary he was entitled to.
The CEO also discovered that Malone had allegedly been writing himself checks disguised as bonuses and had been giving himself unauthorized additional salary payments. It is also alleged that the defendant had used the company’s credit card for personal expenses and used funds to make unauthorized donations to an organization that he personally supported. A forensic audit concluded that Malone had embezzled roughly $950,000 from the company between 2012 and 2016.
The defendant has been charged with theft from a program involving federal funds. That offense carries a maximum term of 10 years. At this point in time, the defendant is innocent until proven guilty beyond a reasonable doubt in a court of law. Additional details have been made available here.