Dive Brief:
- A judge sentenced the former CEO of Stimwave Technologies to six years in prison Monday for creating and selling a fake medical device component.
- The judge imposed the sentence, which includes a further three years of supervised release, after a jury found the former CEO, Laura Perryman, guilty of healthcare fraud and conspiracy to commit healthcare fraud and wire fraud.
- Perryman was taken to court after investigators became suspicious that Stimwave was marketing a dummy piece of plastic as a receiver of radiofrequency energy.
Dive Insight:
Stimwave developed a neurostimulator system to treat chronic pain. After the device came to market, physicians reported problems implanting a receiver component in certain patients. The component, which transmitted energy from an external power source to the electrodes, was too long. In response, Perryman ordered the creation of a plastic component that lacked the ability to transmit energy but could be cut to size, the court heard.
“Perryman callously created a dummy medical device component and told doctors to implant it into patients,” U.S. Attorney Damian Williams said in a statement. “She did this out of greed, so doctors could bill Medicare and private insurance companies approximately $18,000 for each implantation of that dummy component and so she could entice doctors to buy her device for many thousands of dollars.”
A jury agreed with the case made against Perryman, reaching a unanimous verdict after an 11-day trial in March. Perryman was convicted of one count of healthcare fraud and one count of conspiracy to commit healthcare fraud and wire fraud, charges that respectively carry maximum sentences of 10 years and 20 years in prison.
The judge's sentence includes a criminal monetary penalty of $200. Separately, the U.S. Securities and Exchange Commission has charged Perryman with defrauding investors out of about $41 million. The former CEO is accused of making false and misleading statements about a Stimwave product.
