March 1, 2018

Feds: CT biotech CFO stole nearly $1M

A New Haven biotech's former finance chief is accused of embezzling nearly $1 million from his employer, federal prosecutors say.

Thomas Malone, 48, of New Haven, was arrested Thursday on a criminal complaint charging him with theft of federal funds from Artificial Cell Technologies Inc. (ACT), the Connecticut U.S. Attorney's Office said.

Malone was freed on $50,000 bond following his appearance before a federal magistrate in New Haven, authorities said. If convicted, he faces up to 10 years in federal prison.

According to investigators, Malone was responsible for 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 has collected more than $4 million in federal research grants as part of its ongoing development of anti-malarial and respiratory-virus vaccines, authorities said.

In Nov. 2016, ACT's chief executive officer discovered that Malone was paying himself approximately $660,000 in annual salary, far above his approved pay of $281,000, authorities said.

After reviewing ACT's payroll and other financial records, investigators said the CEO discovered that, for several years, Malone had 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 forensic audit later revealed that, between 2012 and 2016, Malone had embezzled approximately $950,000 from ACT.

Malone could not be immediately located Thursday for comment.

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