Devices

Former Stimwave CEO Indicted

The Department of Justice says former Stimwave CEO Laura Perryman was named in a two-count indictment in connection with a scheme to create and sell a non-functioning dummy medical device for implantation in patients suffering from chronic pain, resulting in millions of dollars of losses to federal healthcare programs. A department statement also discusses a non-prosecution agreement reached with the company in which Stimwave accepted responsibility for its conduct by (1) making admissions and stipulating to the accuracy of an extensive statement of facts; (2) paying a $10 million penalty; and (3) maintaining an adequate compliance program.

A False Claims Act civil lawsuit against the company was settled, the department says, by the company admitting and accepting responsibility for the conduct alleged in the civil complaint and agreeing to pay $8.6 million, which will be credited toward the $10 million penalty in the non-prosecution agreement.

The legal documents indicate, the department says, that Stimwave was founded by Perryman and others in 2010 on the premise that its products would provide non-opioid alternatives to chronic pain management. They say that from 2017 to her termination in 2019, Perryman engaged in a multi-year scheme to design, create, manufacture, and market an inert, non-functioning component of the company’s StimQ PNS system. The non-functioning component served no medical purpose but was included with the device through, in or about 2020 to make the product financially viable for doctors to purchase.

As a result of misrepresentations from Perryman and the company, the department says, she caused doctors and medical providers to unwittingly implant the non-functional component into patients and submit fraudulent reimbursement claims for implantation of the component to Medicare, resulting in millions of dollars in losses to the federal government.

Perryman, of Delray Beach, FL, has been charged with one count of conspiracy to commit wire fraud and healthcare fraud, and one count of healthcare fraud.

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