Ex-exec of Cleveland Clinic spinoff admits to defrauding system

A former Cleveland Clinic spinoff executive on Nov. 16 pleaded guilty to charges of conspiracy, wire fraud and making false statements in an attempt to defraud the health system, cleveland.com reports.

Here are five things to know:

1. Wisam Rizk, 43, pleaded guilty to the charges Nov. 16. Mr. Rizk served as the chief technology officer of Interactive Visual Health Records, a company formed by Cleveland Clinic Innovations, the health system's commercialization arm.

2. Federal prosecutors allege Mr. Rizk and an associate concocted a scheme to defraud Cleveland Clinic by having IVHR contract with a shell company to get paid for services the shell company never intended to provide, the report states. Instead, a second international company was paid less to provide those services, and Mr. Rizk pocketed the difference, which amounted to approximately $2.7 million.

3. When police questioned Mr. Rizk about the scheme, he allegedly lied about his involvement. The health system fired Mr. Rizk and his associate upon discovering the fraud scheme. Mr. Rizk was arrested last year. His associate pleaded guilty to charges of conspiracy and making false statements to the FBI in October 2017 and will likely face between 41 and 51 months in federal prison, the report states.

4. Mr. Rizk, an Austrian citizen, agreed to deportation after his sentencing, which is scheduled to take place March 13, 2019. He also agreed to a schedule to pay a restitution of $75,000 during the next several months, and forfeit the $75,000 he paid to be released from jail on bond, which will also go toward restitution. As part of his plea deal, prosecutors agreed to drop 26 other charges of wire fraud.

5. While prosecutors and Mr. Rizk and his lawyer have yet to agree on a sentencing range, Mr. Rizk faces more than five years in federal prison. The exact amount of restitution is also undecided, the report states.

To access the full report, click here.

Editor's note: Becker's Hospital Review reached out to Cleveland Clinic for comment and will update the report as more information becomes available.

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