A Florida woman was sentenced to six years in prison after her company passed off an ”inert, non-functioning” medical implant as a way to provide pain relief wirelessly, the U.S. Department of Justice announced on Monday.
Laura Perryman, former CEO of medtech company Stimwave, was indicted for selling a surgically implanted receiver for $16,000, which law enforcement officials say “was marketed as a receiver of radiofrequency energy, but it was made of plastic and could not function as a receiver.”
Perryman was convicted in March of health care fraud and conspiracy to commit health care fraud and wire fraud following an 11-day non-jury trial.
“Laura 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.
“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,” Williams added.
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Founded in 2010, Stimwave claimed to manufacture and distribute neurostimulation devices meant to treat chronic pain. According to Stimwave marketing materials, the device involved an external transmitting lead and a thin receiver inside the body to use “electrical signals to interrupt pain signals to the brain.”
In a 2017 interview with technology news outlet Engadget, Perry championed Stimwave’s technology and its ability to change lives.
“You know you are making a positive impact on people's lives when some of these people call you up and say, ‘You know, I was going to kill myself before this,’” she said. “We had one the other day, someone who had facial pain for 15 years, was bedridden. This person said their pain was zero after receiving our system.”
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In 2018, Stimwave raised $50 million for undisclosed investors, according to biotech outlet BioSpace.
According to the DOJ, however, the initial design of the internal receiver was too long to be implanted in many patients, and “could not be cut or trimmed to shorten it without interfering with the functionality.”
Without being able to implant and receive reimbursement for implanting a receiver, “doctors would incur a substantial financial loss with every purchase,” the DOJ said. So Stimwave—at Perryman’s direction—released a new receiver that could be trimmed to fit.
“It was made entirely of plastic, contained no copper, and therefore had no conductivity,” the announcement explained, adding Perryman instructed Stimwave employees to vouch for the effectiveness of the dummy implant.
Along with the six-year prison sentence, Perryman was sentenced to three years of supervised release.
Stimwave filed a voluntary petition for Chapter 11 bankruptcy protection in 2022. In March, the company was ordered to pay a $10 million monetary penalty. Visitors to its website who have “permanently implanted” devices are urged to contact their physicians.
Edited by Ryan Ozawa.
