The former head of Cleveland Clinic Innovations, who pleaded guilty to defrauding the health system out of nearly $3 million, was sentenced to 30 months in prison.
Gary Fingerhut, 58, was also ordered to pay the more than $2.7 million that was diverted from the Cleveland Clinic as part of the scheme in restitution, the Department of Justice announced. Fingerhut pleaded guilty to one count of wire services fraud and one count of making false statements for his role in October 2017.
Fingerhut was expected to be sentenced in January, and attorneys anticipated that he could face between 41 and 51 months in jail.
Fingerhut was the executive director of Cleveland Clinic Innovations for two years before the FBI uncovered the fraud scheme in 2015. Fingerhut conspired with Wisam Rizk, chief technology officer of Interactive Visual Health Records, a spinoff of Innovations that was formed to build a digital charting tool for the clinic’s doctors.
Rizk, prosecutors say, was involved in incorporating iSTAR FZE LLC, a shell company that was used to divert the funds. ISTAR did not provide any goods or services, despite submitting a bid to IVHR to assist with software development.
Cleveland Clinic employees are banned from receiving financial benefits from or having a personal or familial financial stake in companies that it works with, DOJ said. Fingerhut was formally trained on the system’s ethics policies.
Rizk also paid Fingerhut a “commission” or a “referral” for not disclosing the scheme. In all, Fingerhut collected close to $469,000 in these payments. Fingerhut was fired by Cleveland Clinic in 2015 once the criminal charges came to light.
Rizk was charged by the feds in October 2017, after Fingerhut had already pleaded guilty in the case. He has also pleaded guilty for his role in the fraud scheme and is awaiting sentencing.