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Former CFO Of Area Biotech Company Admits Embezzling $1 Million

U.S. District Court in New Haven. Photo Credit: Google Maps
Artificial Cell Technologies, Inc. (ACT) in New Haven Photo Credit: Google Maps

The former CFO of a Connecticut biotech company has admitted to embezzling more than a million dollars from his employer, which receives federal research grants.

New Haven resident Thomas Malone, who was the CFO of Artificial Cell Technologies Inc. (ACT), has pleaded guilty to four counts of theft from a program involving federal funds. He has also agreed to pay $1,031,508.07 in restitution.

Artificial Cell Technologies is a small biotech company that is currently working on developing better ways to deliver malaria and Respiratory Syncytial Virus vaccines to those in need.

In addition to receiving funding from private investors, the company has received approximately $4.1 million in grants from the National Institutes of Health since 2008.

According to U.S. Attorney John Durham, as FCO, Malone’s responsibilities included collecting, posting, and depositing investor and grant funds; tracking and reporting grant expenditures; managing accounts payable and cash disbursements; facilitating payroll; reconciling ACT credit card and bank accounts; and providing overall financial management.

In November 2016, the CEO of ACT discovered that Malone had been paying himself $660,000 annually, nearly double the $281,000 salary he was supposed to receive.

Further investigation found that for several years, Malone had been writing checks to himself that were disguised as bonuses and was giving himself unauthorized additional salary payments.

Malone was also using his company credit card for personal use and used ACT’s funds to make unauthorized donations to an organization he supported.

Malone was arrested on March 1. He remains released on $50,000 bond and is scheduled to be sentenced on Jan. 18, when he will face up to 10 years in prison on each count.

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