Former Cleveland Clinic executive gets prison time in $2.7M fraud scheme

The former executive director of Cleveland Clinic Innovations, the development and commercialization arm of Cleveland Clinic, was sentenced Dec. 19 to 30 months in prison for his role in a fraud scheme, according to the Department of Justice.

Federal prosecutors brought charges in September 2017 against Gary Fingerhut, and he pleaded guilty one month later to his role in a conspiracy to defraud Cleveland Clinic out of more than $2.7 million.

Mr. Fingerhut was the executive director of Cleveland Clinic Innovations for about two years before his employment was terminated in June 2015. During his time at CCI, Mr. Fingerhut hired Wisam Rizk to serve as a consultant and then chief technology officer of Interactive Visual Health Records, which was created to develop a visual medical charting concept into a marketable product.

Mr. Fingerhut and Mr. Rizk were prohibited from receiving financial benefit or having financial interests in the companies Cleveland Clinic did business with, unless expressly approved by the Clinic.

Mr. Rizk worked with others to incorporate a shell company, known as iStarFZE, and used the shell company to submit a bid to Cleveland Clinic to design and develop IVHR's software. He did not disclose his financial interest in iStarFZE to Cleveland Clinic, and he rewarded Mr. Fingerhut financially for not disclosing the fraud scheme. Between August 2012 and November 2014, Mr. Fingerhut accepted nearly $469,000 in payments from Mr. Rizk.

In addition to his prison term, Mr. Fingerhut was ordered to pay $2.78 million in restitution for defrauding Cleveland Clinic. Mr. Rizk pleaded guilty to his role in the fraud scheme and is awaiting sentencing.

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