Ohio Man Charged for Allegedly Defrauding Cleveland Clinic out of $2.8M

A man in Westlake, Ohio has been indicted in federal court for his role in a conspiracy to defraud the Cleveland Clinic out of at least $2.8 million.

According to a press release from the Department of Justice, Wisam Rizk was charged in a 29-count indictment with one count of conspiracy to commit wire fraud and honest services wire fraud, 27 counts of wire fraud and honest services wire fraud and one count of obstruction of justice. Rizk worked as the chief technology officer at Interactive Visual Health Records (IVHR), a company formed by Cleveland Clinic Innovations to develop a visual medical charting concept of certain Clinic physicians into a functioning, marketable product, according to the indictment.

At IVHR, Rizk was hired by Gary Fingerhut, the former executive director at Cleveland Clinic Innovations. The two men, 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.

Nonetheless, 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. Rather, 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 to create the false impression it was an operational business, according to the indictment.

Rizk then 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, according to the indictment. Rizk periodically paid Fingerhut a “referral” or “commission” fee in return for Fingerhut not disclosing the fraud scheme, according to the indictment.

“This defendant was hired to help develop advanced medical technology and instead defrauded the Cleveland Clinic out of millions of dollars,” U.S. Attorney Justin E. Herdman said in a statement. “We will continue to aggressively prosecute corruption and self-dealing.”

“Rizk utilized the trust that had been placed in him and his immense technical and organizational skill as weapons against the very company and associates who had entrusted him for the purpose of stealing close to $3 million,” added FBI Special Agent in Charge Stephen D. Anthony.

Rizk was arrested last week, while Fingerhut has pleaded guilty to his role in the conspiracy and is awaiting sentencing.