Former Biotech CEO Arrested for Implanting Phony Medical Devices in Patients

Former Biotech CEO Arrested for Implanting Phony Medical Devices in Patients

Image by Getty / Futurism

New bad guy alert: according to an FBI indictment, Florida woman Laura Perryman, the former CEO of a health-tech company called Stimwave, was arrested on Thursday “in connection with a scheme to create and sell a non-functioning dummy medical device for implantation into patients suffering from chronic pain,” Vice reports, accusations that Perryman’s lawyer has since denied.

In other words, the FBI is alleging that Perryman knowingly created and sold fake medical implants that were entirely made out of plastic to medical systems and their patients, under the guise that the devices would be able to ease chronic pain.

The news comes after Stimwave filed for bankruptcy last year, and has previously agreed to pay $10 million over a related whistleblower lawsuit, Reuters reports.

Perryman and Stimwave, which according to Engadget received FDA approval for an early version of its implant back in 2014, actually sold two different rodlike implants, which they claimed could both alleviate pain by way of electrical signaling — no addictive painkillers required.

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

Perryman’s firm even had some big-name celebrity sponsors, notably football Hall of Famer Joe Montana.

“If this was another major surgical process, I probably would’ve said no,” Montana told CBS — which did a whole segment documenting Montana’s experience undergoing the “state of the art” procedure — in 2019. “But I really think this is going to be the answer to my knee and I’m looking forward to an hour or two from now when I get done.”

“It’s just like anything,” Montana continued. “What’s good for me is not always what’s good for you, right? Everyone should do their own research on it. But I wouldn’t be doing this and moving forward with it if I didn’t believe it wasn’t something that could help people.”

But as Vice explains, their first product, a nine-inch-long, computer-chip-embedded device dubbed the “Pink Stylet,” was often too large for doctors to comfortably implant into some patients. But rather than turn down any potential sales, the FBI alleges that Perryman and Stimwave instead came out with the “White Stylet,”  which they claimed was just a smaller and more comfortable — but equally as effective — version.

It’s unclear which version of the device Montana received — which, as it turns out, could’ve made a huge difference.

Because the White Stylet was nothing more than a piece of plastic, according to the FBI’s indictment. No computer chip, no electrical signaling. Just plastic.

And they weren’t cheap, either — according to the FBI, Perryman and Stimwave sold the phony plastic tubes at over $16,000 a pop.

“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,” US Attorney Damian Williams said in the indictment.

“The defendant and Stimwave did this,” he added, “so that they could charge medical providers many thousands of dollars for purchasing their medical device.”

Meanwhile, Perryman’s lawyer Jared Dwyer of Greenberg Traurig called the allegations “wrong, starting with the description of the neurostimulator that Laura invented” in a statement to Futurism.

“Every piece of that system had a function and was necessary depending on the patient’s needs,” he added. “And, at the end of the day, the components that were used were up to the doctors. This is a case about a company looking for a quick way out that decided to scapegoat the founder.”

Per the indictment, Perryman has officially been charged with “one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison, and one count of health care fraud, which carries a maximum potential sentence of ten years in prison.”

As the FBI notes in the indictment, these are still only accusations, and Perryman has yet to go to trial.

“Laura looks forwarded to addressing these allegations in court,” Dwyer told Futurism.

But given the evidence, things aren’t looking great for her. Besides, you involve Joe Montana in your scam, and you involve the fury of the American public.

“Our Office will continue to do everything in its power to bring to justice anyone responsible for perpetuating health care fraud,” said Williams, “which in this case led to patients being used as nothing more than tools for financial enrichment.”

Futurism has reached out to Stimwave for comment.

READ MORE: People Were Unwittingly Implanted With Fake Devices in Medical Scam, FBI Alleges [Vice]

More on medical scammers: Elizabeth Holmes Hopes Her New Baby Will Keep Her out of Prison