The former chief technology officer from Cleveland Clinic spun-out Interactive Visual Health Records has been arrested and indicted on charges that he defrauded the Clinic out of approximately $2.8 million, according to a Cleveland.com report.
Former CTO Wisam Rizk faces a total of 29 charges, including conspiracy, wire fraud and honest services wire fraud and obstruction of justice, according to the report.
Prosecutors claim that Rizk was involved in a scheme to defraud the Cleveland Clinic through a contract IVHR had with a shell company, intending to get paid for services it did not actually provide, Cleveland.com reports.
The contracted services were provided by a separate company located outside the US and was paid less than the agreed upon price, with Rizk holding onto the difference, according to the report.
Rizk was reportedly hired by former Cleveland Clinic Innovations head Gary Fingerhut, who earlier this month plead guilty to charges that he helped defraud the Clinic to the tune of approximately $2.7 million.
The former CTO helped found a shell company, which submitted a bid to the clinic to help develop IVHR’s software and increased the price the Clinic paid for the development, according to the report. Rizk then paid Fingerhut nearly $500,000 in fees to keep him silent on the scheme.
Rizk has plead not guilty to the charges and has told the FBI he was not involved with the scheme, according to Cleveland.com.