CLEVELAND, OH (WOIO) - A Westlake man has been arrested for allegedly bilking the Cleveland Clinic out of $2.8 million.
He was indicted in federal court for his alleged role in a conspiracy to defraud the major Cleveland hospital, according to U.S. Attorney Justin E. Herdman and FBI Special Agent in Charge Stephen D. Anthony.
Wisam Rizk is facing a 29-count indictment, and is charged with wire fraud and obstruction of justice.
He was arrested Thursday evening.
Rizk worked as chief technology officer at Interactive Visual Health Records, 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.
Rizk was hired at IVHR by Gary Fingerhut, the former executive director at Cleveland Clinic Innovations.
Fingerhut has pleaded guilty to his role in the conspiracy and is awaiting sentencing.
Rizk and Fingerhut, as a condition of their employment, were prohibited from receiving any financial gains from companies the Clinic did business with, unless they were expressly disclosed to, and approved by, the Clinic.
Rizk and others allegedly formed a shell company known as iStarFZE LLC (ISTAR) that did not actually perform or provide any goods or services.
Rizk reportedly established a web site, email addresses and a mailing address in New York City to create the false impression ISTAR was an operational business, according to the indictment.
Rizk used ISTAR to submit a bid to the Clinic to develop and design 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," Herdman said. "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," Anthony said.
The investigation is ongoing.
The case is being prosecuted by Assistant U.S. Attorney Rebecca Lutzko following an investigation by the Federal Bureau of Investigation.