Another guilty plea in Cleveland Clinic spinout fraud case

Another participant in an alleged scheme to defraud the Cleveland Clinic out of approximately $2.7 million has come forward with a guilty plea, according to a Cleveland.com report.

Wisam Rizk, former chief tech officer of Cleveland Clinic Innovations’ spun-out Interactive Visual Health Records, pleaded guilty to charges of conspiracy, wire fraud and making false statements, according to the report.

Rizk admitted involvement in a scheme to defraud the Cleveland Clinic by having IVHR contract with a shell company for work that the company did not provide. Instead, a company out of the country provided the contracted work for much less than the contract with the shell company, with Rizk picking up the difference, according to the Cleveland.com report.

In the scheme, Rizk worked with former Cleveland Clinic Innovations exec Gary Fingerhut, who pleaded guilty last October.

Rizk and others created the shell company iStarFZE and attempted to make it look legitimate so it could put in a bid to the clinic looking to develop IVHR’s software. After the company won the contract, Rizk paid Fingerhut more than $460,000 in exchange for keeping the deal quiet, according to the report.

A sentencing range for Rizk has not yet been agreed upon, but will be determined by U.S. District Judge Christopher Boyko on March 13, according to the Cleveland.com report. Rizk could face more than five years in federal prison and could be on the hook for as much as $2.7 million, though will likely argue that he should pay much less.

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