A former neurostimulator company chief has been indicted for creating and selling a fake medical component that was implanted into patients to scam insurers.
Laura Perryman headed the Florida company Stimwave LLC, which sold useless pieces of plastic that were implanted into chronic pain patients in the guise of electronic receivers.
According to the Department of Justice, the “dummy” device components jeopardized the patients’ health and scammed insurers out of millions of dollars.
Stimwave admitted wrongdoing and entered into a non-prosecution agreement in October last year, details of which were unsealed last week. The company — which filed for bankruptcy in June — was fined $10 million and agreed to meet compliance commitments for three years.
The U.S. Attorney for the Southern District of New York said in a statement that Perryman was causing doctors to unwittingly bill Medicare and private insurers more than $16,000 for each fake implant.
Perryman, 54, of Delray Beach, Florida, who founded Stimwave in 2010 to produce non-opioid alternatives for those with chronic pain, was arrested last week.
She has been charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison, and one count of healthcare fraud, which carries a maximum potential sentence of 10 years in prison.
FBI Assistant Director Michael J. Driscoll said in a statement on Thursday last week:
“Ms. Perryman, as the Chief Executive Officer of Stimwave, allegedly led a scheme to sell medical devices that contained a non-functioning component that doctors unwittingly implanted into patients suffering from chronic pain.
“As a result of her illegal actions, not only did patients undergo unnecessary implanting procedures, but Medicare was defrauded of millions of dollars.
“Today’s action demonstrates the FBI’s continuing commitment to protect Medicare and other government programs from financial fraud and abuse.”
The neurostimulator device was known as a StimQ PNS System.
The dummy component, a fake receiver known as a White Stylet, was surgically implanted but performed no function.
To perpetuate the lie that the White Stylet was functional, Perryman oversaw training that suggested to doctors that the White Stylet was a “receiver,” when, in fact, it was made entirely of plastic, contained no copper, and therefore had no conductivity.
According to Justice, the White Stylet was included with the device in order to make the product financially viable for doctors to purchase.
A civil fraud lawsuit has also been filed against the company.
ICIJ has sought comment from Stimwave.
In a past investigation, the Implant Files, ICIJ revealed how health authorities failed to protect millions of patients from poorly tested implants.
ICIJ has also documented a surge in non-prosecution agreements that allow companies to pay to settle cases.