People Were Unwittingly Implanted With Fake Devices in Medical Scam, FBI Alleges

Chronic pain patients were implanted with “dummy” pieces of plastic and told it would ease their pain, according to an indictment charging the  former CEO of the firm that made the fake devices with fraud. 

Laura Perryman, the former CEO of Stimwave LLC, was arrested in Florida on Thursday. According to an FBI press release, Perryman was indicted “in connection with a scheme to create and sell a non-functioning dummy medical device for implantation into patients suffering from chronic pain, resulting in millions of dollars in losses to federal healthcare programs.” According to the indictment, patients underwent unnecessary implanting procedures as a result of the fraud. 

Perryman was charged with one count of conspiracy to commit wire fraud and health care fraud, and one count of healthcare fraud. Stimwave received FDA approval in 2014, according to Engadget, and was positioned as an alternative to opioids for pain relief.

"From the patient perspective, they definitely want pain-relief alternatives that are not opioids, but taking the leap from opioid to surgery and a tiny battery inside your body sounds daunting," Perryman told Engadget in a 2017 interview.

The Stimwave “Pink Stylet” system consisted of an implantable electrode array for stimulating the target nerve, a battery worn externally that powered it, and a separate, 9-inch long implantable receiver. When doctors told Stimwave that the long receiver was difficult to place in some patients, Perryman allegedly created the “White Stylet,” a receiver that doctors could cut to be smaller and easier to implant—but was actually just a piece of plastic that did nothing.

“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,” the FBI stated. “In addition, Perryman directed other Stimwave employees to vouch for the efficacy of the White Stylet, when she knew that the White Stylet was actually non-functional.” 

Stimwave charged doctors and medical providers approximately $16,000 for the device, which medical insurance providers, including Medicare, would reimburse the doctors’ offices for. 

“As alleged, at the direction of its founder and CEO Laura Perryman, Stimwave created a dummy medical device component—made entirely of plastic—designed to be implanted in patients for the sole purpose of causing doctors to unwittingly bill Medicare and private insurance companies more than $16,000 for each implantation of the piece of plastic,” U.S. Attorney Damian Williams said in a press release. “The defendant and Stimwave did this so that they could charge medical providers many thousands of dollars for purchasing their medical device.”

“As a result of her illegal actions, not only did patients undergo unnecessary implanting procedures, but Medicare was defrauded of millions of dollars,” FBI Assistant Director Michael J. Driscoll said. 

Perryman is set to be presented at the United States District Court for the Southern District of Florida on Thursday.