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CEO Faces Up to 30 Years in Prison for Selling Fake Medical Implants

It was just a piece of plastic.

The former CEO of a medical device company is facing prison after being found guilty of manufacturing and distributing fake medical implants.

Stimwave designed and sold implantable neurostimulation devices for treating chronic pain. Laura Perryman, who was CEO at the time, oversaw the production process for the StimQ PNS System, which consisted of electrodes and a receiver that allowed it to transmit energy from an external power source to a component the company called the “Pink Stylet.”

Stimwave sold the StimQ to medical professionals for approximately $16,000 then instructed them to bill medical insurance providers for implanting the device, resulting in reimbursements between $16,000 and $24,000.

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Issues arose when physicians informed Stimwave that they were having trouble implanting the Pink Stylet in certain patients because it was too long, according to the U.S. Department of Justice. The official report accused Perryman of knowing that the Pink Stylet could not be cut or trimmed without damaging the receiver. Instead of coming up with a functional solution, Stimwave created the White Stylet, which was made entirely of plastic and didn’t do anything but could be cut to size.

Perryman even went so far as to oversee a training that suggested to doctors that the White Stylet was a “receiver” and convince Stimwave employees to vouch for the White Stylet.

U.S. Attorney Damian Williams said, “Laura Perryman brazenly created a dummy medical device component — made entirely out of plastic — to be implanted into patients. She marketed that dummy component as a means for doctors to bill Medicare and private insurance companies approximately $18,000 for each implantation of the piece of plastic. She did this so that she could entice doctors to buy her device for many thousands of dollars. Perryman recklessly used patients as tools for financial gain, and this jury’s unanimous verdict sends a resounding message that individuals who defraud health care programs will be held criminally accountable.”

Perryman was convicted of one count of health care fraud, which carries a maximum sentence of 10 years in prison, and one count of conspiracy to commit health care fraud and wire fraud, which carries a maximum sentence of 20 years in prison.

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