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Former Cleveland Clinic executive Gary Fingerhut pleads guilty; prison sentence likely

Former Cleveland Clinic Innovations executive director Gary Fingerhut has pleaded guilty to two charges related to a scheme that allegedly cost the clinic more than $2.7 million.

At an arraignment on Tuesday morning, Oct. 10, Fingerhut pleaded guilty to one count of conspiracy to commit wire fraud and honest services fraud and one count of making false statements, according to a spokesman for the U.S. Attorney's Office.

He'll likely spend at least a few years in prison. Although Fingerhut won't be sentenced until Jan. 30, his attorney and federal prosecutors have agreed to ask for a sentence of between 41 and 51 months in federal prison, according to his attorney, J. Timothy Bender of Bender, Alexander & Broome in Cleveland.

"Mr. Fingerhut has admitted his guilt and is very sorry for what he's done," Bender told Crain's.

U.S. District Judge Christopher Boyko will decide the exact sentence, which also could require Fingerhut to pay restitution to the clinic.

The clinic fired Fingerhut in June 2015 after the FBI told the hospital system that he made transactions that violated the system's internal policies.

Fingerhut allegedly received at least $469,000 in illicit payments for playing along with a scheme to defraud a clinic spinoff company called iVHR, according to charges filed last month through a bill of information.

The scheme involved an individual identified only as "W.R." and "others known and unknown to the United States Attorney."

The bill of information noted that W.R. and others set up a shell company called iStarFZE LLC to do software development work for iVHR, but that company then hired another individual to do the work for less. The information noted that W.R. would pay Fingerhut fees to not disclose the scheme.

The arraignment took place in front of Magistrate Judge William Baughman.

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