Laura Perry, founder and former CEO of Stimwave Technologies, was sentenced on Monday to six years in prison after being found guilty of health care fraud.
Perryman created and sold a medical device component and told doctors that they could bill Medicare $18,000 for each implantation of the component, according to the U.S. Attorney for the Southern District of New York.
“Laura Perryman callously created a dummy medical device component and told doctors to implant it into patients,” said U.S. Attorney Damian Williams in a press release. “Perryman breached the trust of the doctors who bought her medical device, and more importantly, the patients who were implanted with that piece of plastic.”
Florida-based Stimwave created and sold a number of implantable neurostimulation devices including a device meant to treat chronic nerve pain with electrical currents.
The device consisted of three components — an electrode-containing lead, a receiver, and an external power source. Stimwave charged doctors $16,000 for the whole device and instructed them to bill insurers such as Medicare $18,000.
However, some physicians had trouble implanting the device’s receiver due its size. Perryman instructed her staff to create a dummy receiver that could be cut to size by the doctors, according to a statement from the U.S. Attorney’s Office.
The dummy device was made “made entirely of plastic” and could not function as a receiver, per the statement.
In December, the U.S. Securities and Exchange commission also charged Perryman for defrauding investors out of $41 million. The commission alleged that, from 2018 to 2019, Perryman made misleading statements about the device to investors. Perryman allegedly told investors the device was approved by the U.S. Food and Drug Administration and was the only effective device of its kind on the market.