U.S. Attorney's Office for the Northern District of Ohio issued the following announcement on Dec. 19.
A Solon man was sentenced to 30 months in prison for his role in a conspiracy to defraud the Cleveland Clinic out of more than $2.7 million.
Gary Fingerhut, 58, was ordered to pay $2,784,847 in restitution. He previously pleaded guilty to one count of conspiracy to commit wire fraud and honest services wire fraud and one count of making false statements.
According to court documents filed in the case:
Fingerhut worked at Cleveland Clinic Innovations, which assisted doctors and other Clinic personnel with inventing medical products and marketing those products, typically through the formation of a spin-off company. Fingerhut was hired as general manager of information technologies in 2010 and became executive director in 2013. The Clinic terminated his employment in June 2015.
In 2012, the Cleveland Clinic Innovations formed a subsidiary company known as Interactive Visual Health Records (IVHR), to develop a visual medical charting concept of certain Clinic physicians into a functioning, marketable product. Fingerhut hired Wisam Rizk to work as a consultant and then chief technology officer at IVHR to develop the product.
Fingerhut and Rizk, as a condition of their employment, were prohibited from receiving any financial benefit or having any personal or familial financial interests in companies the Clinic did business with, unless they were expressly disclosed to, and approved by, the Clinic. Fingerhut underwent formal training on the Clinic’s ethics and compliance polices and requirements.
Rizk and others caused to be incorporated a shell company known as iStarFZE LLC (ISTAR) that did not actually perform or provide any goods or services. It was established in the name of a nominee owner. Rizk caused ISTAR to establish a web site and email addresses and a mailing address in New York City.
Rizk caused ISTAR to submit a bid to the Clinic to develop and design IVHR’s software and to increase the price the Clinic paid for the software design and development, all without disclosing his financial interest in ISTAR.
Rizk periodically paid Fingerhut a “referral” or “commission” fee in return for Fingerhut not disclosing the fraud scheme.
Fingerhut accepted nearly $469,000 in these payments from Rizk between August 2012 and November 2014. During that time, Fingerhut, Rizk. and others diverted more than $2.7 million from the Clinic.
Original source can be found here.