Thomas Malone, 49, of New Haven, pleaded guilty yesterday in New Haven federal court to charges related to his embezzlement of approximately $1 million from a New Haven biotech company that receives federal research grants.

Malone was the CFO of Artificial Cell Technologies Inc. of New Haven, a small biotech company that is currently working on developing better ways to deliver malaria and Respiratory Syncytial Virus vaccines to affected populations. In addition to receiving funding from private investors, ACT received approximately $4.1 million in grants from the National Institutes of Health since 2008.

As the CFO, 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.

ACT’s CEO discovered that Malone was paying himself approximately $660,000 in annual salary, far above the approximately $281,000 in salary he was entitled to receive, in November 2016.

Upon further review of payroll and other financial records, ACT’s CEO discovered that Malone had for several years been writing checks to himself that were disguised as bonuses, that he had been giving himself unauthorized additional salary payments, that he had been using the ACT credit card for personal expenditures, and that he had used ACT’s funds to make unauthorized donations to an organization that Malone personally supported.  A subsequent forensic audit revealed that between 2012 and 2016, Malone had embezzled nearly $1 million from ACT.

Malone was arrested on a criminal complaint on March 1, 2018.

Malone pleaded guilty to four counts of theft from a program involving federal funds; sentencing is scheduled for Jan. 18. He also has agreed to pay restitution of roughly $1.03 million. He is released on a $50,000 bond pending sentencing.