Former Medtech CEO Sentenced to Six-Year Prison Term for Healthcare Fraud

Laura Perryman, the founder and former CEO of Stimwave, was sentenced yesterday to six years in prison in connection with a scheme involving a fake implantable medical device designed to treat chronic pain and telling practitioners that they could claim approximately $18,000 for each procedure. The sentence was handed down by US District Judge Denise L. Cote following a conviction in March of this year, said a statement from the US Attorney’s Office, Southern District of New York.

Non-conductive plastic didn't work by design.

As we reported in March 2023, the StimQ PNS received 510(k) clearance from FDA in 2016 for the wireless device designed to treat chronic neuropathic pain. The device included an implanted neurostimulator, called the Pink Stylet, that was paired with an external battery. Soon after the device came to market, surgeons reported problems implanting the Pink Stylet in some patients because of its length. To remedy this, Stimwave developed a second iteration of the device containing the so-called White Stylet to receive the radio-frequency energy, but it was made entirely of non-conductive plastic and, therefore, could not work as intended. As we noted at the time, “Its sole function was to bilk Medicare and private insurers out of thousands of dollars for each procedure.”

"She did this out of greed."

“Laura Perryman callously created a dummy medical device component and told doctors to implant it into patients,” said Damian Williams, US Attorney for the Southern District of New York, in a statement published yesterday following the sentencing. “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. This prosecution and today’s sentence are part of this office’s ongoing work in combating fraud in the healthcare system and protecting patients from being exploited for money,” said Williams.

Perryman was found guilty of healthcare fraud and conspiracy to commit healthcare fraud and wire fraud. In addition to the six-year prison sentence, she was sentenced to three years of supervised release.