The fraud case involving Cleveland Clinic Innovations, Cleveland Clinic’s commercialization arm, has resurfaced.
A former executive of a Cleveland Clinic spinoff business has pleaded guilty to defrauding the health system, according to Cleveland.com. Wisam “Sam” Rizk, the ex-CTO of the business, pleaded guilty to charges of wire fraud, conspiracy and making false statements.
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Last fall, Rizk was charged for his role in the scheme.
Gary Fingerhut, the former executive director of Cleveland Clinic Innovations, hired Rizk first as a consultant and then as the CTO of Interactive Visual Health Records, which was formed by Cleveland Clinic Innovations. IVHR’s purpose was to create a visual medical chart product conceived by Clinic physicians.
According to federal prosecutors, Rizk had IVHR contract with a shell company called iStarFZE to get paid for services iStarFZE never intended to provide. Rather, the services were completed by a different company that was paid less than what was called for in the contract between the Clinic and IVHR. Rizk then took home the difference, according to the U.S. Attorney’s Office.
Additionally, Rizk paid Fingerhut over $460,000 to keep quiet about the scheme. Fingerhut pleaded guilty to charges last year.
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Cleveland Clinic fired Fingerhut and Rizk when the fraud was uncovered, according to Cleveland.com.
As for Rizk, he and federal prosecutors haven’t agreed on a sentencing range and will instead leave it up to U.S. District Judge Christopher Boyko. Sentencing is set for March 13. Rizk could face over five years in federal prison.
The sides also disagree about a restitution amount. While the U.S. Attorney’s Office said the former executive diverted $2.7 million to himself, Rizk is expected to argue that he should have to pay less. Rizk did say he would adhere to a schedule to pay restitution and will pay $75,000 over the next few months. He’ll also forfeit $75,000 he paid for release from jail on bond after his arrest. That amount will go toward restitution.
Rizk agreed to deportation after his sentencing as well. He was born in Lebanon and is a citizen of Austria.
As part of his plea agreement, federal prosecutors agree to drop 26 other wire fraud charges.
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