Ex-Cleveland Clinic Innovation executive pleads guilty in $2.7M fraud case, prison time likely


http://www.fiercehealthcare.com/antifraud/ex-cleveland-clinics-innovation-executive-pleads-guilty-2-7m-fraud-case-prison-time?utm_medium=nl&utm_source=internal&mrkid=959610&mkt_tok=eyJpIjoiWkRSalkyTXpOV0V4WkRkayIsInQiOiJHQUVNRTJhUmhhSkpXVk80NkJoOWo5R21nNW5iV0hQS3NxRzc4SUQrbmRyMFwveXlBUFEwRm83TXFUemp0ZE9aNWlBTmYzSVJWb0dzbXV0RTczYnZSTEFMaGhEeFZKYk9LMWJuaXNxUlRUd2V6WEZnZ3lqRUpYaWp6SU0rbUhUd0cifQ==

Money, handcuffs and a stethoscope

The former head of Cleveland Clinic Innovations pleaded guilty Tuesday for his role in defrauding the nonprofit academic medical center out of more than $2.7 million via a shell company.

Gary Fingerhut was arraigned in U.S. District Court and pleaded guilty to one count of conspiracy to commit wire fraud and honest services fraud and one count of making false statements, Crain’s Cleveland Business reports.

Although he won’t be formally sentenced until Jan. 30, Fingerhut’s attorney told the publication that federal prosecutors will ask U.S. District Judge Christopher Boyko for a sentence of between 41 and 51 months in federal prison. He may also be ordered to pay restitution to the Cleveland Clinic.

Fingerhut served as the executive director of the clinic’s innovation arm for two years until an FBI investigation revealed in 2015 that he was involved in a fraudulent scheme with the chief technology officer of a spinoff company to contract with a company that never intended to perform or provide any goods and services. The deal was in violation of Cleveland Clinic’s ethics and compliance policies and requirements, which prohibit employees from receiving any financial benefit from companies the Clinic did business with, and the organization fired Fingerhut.

Federal prosecutors said Fingerhut accepted at least $469,000 in payments in return for not disclosing the fraud scheme, which diverted nearly $3 million from the Clinic.

Fingerhut’s attorney, J. Timothy Bender of Bender, Alexander & Broome in Cleveland, told Crain’s that Fingerhut is very sorry for his role in the fraud scheme.

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