Hospitals, Health IT

Ex Cleveland Clinic spinoff CTO charged for role in $2.8M fraud against health system

The $2.8 million fraud case involving Cleveland Clinic’s commercialization arm continues to unfold.

The $2.8 million fraud case involving Cleveland Clinic’s commercialization arm continues to unfold. A little more than one week after the former executive director of Cleveland Clinic Innovations, Gary Fingerhut, entered a guilty plea admitting to taking part in the scheme, a grand jury indicted the former consultant/CTO Fingerhut hired for the Cleveland Clinic spinoff business on fraud charges.

Wisam Rizk faces 29 charges, according to court documents, from conspiracy and wire fraud to obstruction of justice. He’s referred to in other documents from the U.S. Attorney’s offices as “W.R.”.

Fingerhut set up Interactive Visual Health Records, or IVHR, to produce a visual medical charting concept from a group of Cleveland Clinic physicians, according to information cited by the attorney’s office. Rizk allegedly set up a shell company known as iStarFZE LLC to produce software for IVHR. That shell company didn’t provide products or services to IVHR. Instead, Rizk contracted with another company to do the work but without revealing that the company had agreed to do the work for a lesser amount or his own financial interest in iStar, according to the indictment. Rizk deposited the difference in bank accounts he controlled. He also made payments to Fingerhut for keeping quiet about the scheme, which totaled $469,000, according to the indictment.

Terry Gilbert, Rizk’s lawyer, told that his client “isn’t criminally culpable.”

“If there were ethical issues, that doesn’t necessarily mean there’s a criminal act,” Gilbert said

Rizk could be looking at a sentence of up to 10 years in prison. Fingerhut, who worked for Cleveland Clinic Innovations from 2010 until he was fired in 2015, is scheduled to be sentenced in January. He faces 41 to 51 months in federal prison.

Photo: zimmytws, Getty Images