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  Department of Justice
  U.S. Attorney's Office
  Southern District of New York
    __________________________________________________________________

  FOR IMMEDIATE RELEASE
  Thursday, March 9, 2023

Former CEO Of Medical Device Company Indicted For Creating And Selling A Fake
Medical Component That Was Implanted Into Patients

  Medical Device Company Admitted Wrongdoing and Entered into
  Non-Prosecution Agreement Requiring $10 Million Monetary Penalty and
  Ongoing Compliance Measures

  Damian Williams, the United States Attorney for the Southern District
  of New York, Michael J. Driscoll, the Assistant Director in Charge of
  the New York Field Office of the Federal Bureau of Investigation
  ("FBI"), and Fernando P. McMillan, the Special Agent in Charge of the
  New York Field Office of the U.S. Food and Drug Administration - Office
  of Criminal Investigations ("FDA-OIC"), announced today the filing of a
  two-count Indictment (the "Indictment") charging Laura PERRYMAN, the
  former Chief Executive Officer ("CEO") of STIMWAVE LLC, a Florida-based
  medical device company, 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.  PERRYMAN was arrested this morning in
  Delray Beach, Florida, and will be presented later today in the United
  States District Court for the Southern District of Florida.

  In addition, Mr. Williams announced the unsealing of a non-prosecution
  agreement (the "Agreement") with STIMWAVE LLC ("STIMWAVE"), which filed
  for bankruptcy on June 15, 2022.  The Agreement was entered into on
  October 29, 2022, and was sealed by the United States Bankruptcy Court
  for the District of Delaware, pending the Government's ongoing
  investigation.  Under the terms of the Agreement, STIMWAVE has accepted
  responsibility for its conduct by, among other things: (i) making
  admissions and stipulating to the accuracy of an extensive Statement of
  Facts; (ii) paying a $10,000,000 monetary penalty; and (iii)
  maintaining an adequate compliance program, to include employing a
  Chief Compliance Officer and holding regular compliance committee
  meetings.  STIMWAVE is also required to cooperate fully with the
  Government.  STIMWAVE's obligations under the Agreement will continue
  for a period of three years from the date of execution of the
  Agreement.

  The U.S. Attorney's Office also unsealed a civil fraud lawsuit filed
  against STIMWAVE under the False Claims Act ("FCA"), and the parties'
  settlement of that suit (the "FCA Settlement").  The settlement has
  been submitted to United States District Judge George B. Daniels for
  approval.  In connection with the FCA Settlement, STIMWAVE admitted and
  accepted responsibility for conduct alleged in the Government's civil
  complaint and agreed to pay $8,600,000 to the United States.  This
  payment will be credited towards the $10,000,000 monetary penalty
  discussed above.  The civil complaint also brings claims against
  PERRYMAN under the FCA, which are pending.

  U.S. Attorney Damian Williams said: "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.  The defendant
  and Stimwave did this so that they could charge medical providers many
  thousands of dollars for purchasing their medical device.  Our Office
  will continue to do everything in its power to bring to justice anyone
  responsible for perpetuating health care fraud, which in this case led
  to patients being used as nothing more than tools for financial
  enrichment."

  FBI Assistant Director Michael J. Driscoll said: "Ms. Perryman, as the
  Chief Executive Officer of Stimwave, allegedly led a scheme to sell
  medical devices that contained a non-functioning component that doctors
  unwittingly implanted into patients suffering from chronic pain.  As a
  result of her illegal actions, not only did patients undergo
  unnecessary implanting procedures, but Medicare was defrauded of
  millions of dollars.  Today's action demonstrates the FBI's continuing
  commitment to protect Medicare and other government programs from
  financial fraud and abuse."

  FDA-OIC Special Agent in Charge Fernando P. McMillan said: "Individuals
  and companies that manufacture and distribute medical devices with
  non-functional components put the health of patients at significant
  risk.  We will continue to pursue and bring to justice those who
  jeopardize the health of their patients and of the public."

  According to the documents unsealed today in Manhattan federal court
  and the United States Bankruptcy Court for the District of
  Delaware:[60][1]

  STIMWAVE was a medical device company that manufactured and distributed
  implantable neurostimulation devices designed to treat intractable,
  chronic pain.  Founded in 2010 by PERRYMAN and others, STIMWAVE was
  headquartered in Pompano Beach, Florida.

  STIMWAVE was founded on the premise that its products would provide
  non-opioid alternatives to chronic pain management.  As the founder and
  CEO of STIMWAVE, PERRYMAN oversaw the design of the StimQ PNS System
  (the "Device"), a neurostimulator medical device that treated chronic
  pain by producing electrical currents to target peripheral nerves
  outside the spinal cord.  From at least in or about 2017 up to and
  including her termination in or about 2019, PERRYMAN, as STIMWAVE's
  CEO, engaged in a multi-year scheme (the "Scheme") to design, create,
  manufacture, and market an inert, non-functioning component of the
  Device -- called the "White Stylet" -- that served no medical purpose
  but was included with the Device through in or about 2020 in order to
  make the product financially viable for doctors to purchase.

  When STIMWAVE originally brought the Device to market in or about 2017,
  it contained three primary components: (i) an implantable electrode
  array (the "Lead") that stimulated the nerve; (ii) an externally worn
  battery that sat outside the body and wirelessly provided power to the
  Lead through the patient's skin (the "Battery"); and (iii) a separate
  implantable receiver measuring approximately 23 centimeters in length
  with a distinctive pink handle -- called the "Pink Stylet."  The Pink
  Stylet contained copper and, unlike the White Stylet, functioned as a
  receiver to transmit energy from the Battery to the Lead.

  STIMWAVE sold the Device to doctors and medical providers for over
  approximately $16,000.  Medical insurance providers, including
  Medicare, would reimburse medical practitioners for implanting the
  Device into patients through two separate reimbursement codes, one for
  implantation of the Lead and a second for implantation of the Pink
  Stylet.  The billing code for implanting the Lead provided for
  reimbursement at a rate of between approximately $4,000 and $6,000,
  while the billing code for implanting a receiver, like the Pink Stylet,
  provided for reimbursement at a rate of between approximately $16,000
  and $18,000.

  Soon after the Device was released, physicians informed STIMWAVE that
  they were having trouble implanting the Pink Stylet in certain patients
  because the Pink Stylet was too long.  STIMWAVE and PERRYMAN knew that
  the Pink Stylet could not be cut or trimmed to shorten it without
  interfering with the functionality of the Pink Stylet as a receiver,
  and without a receiver component for doctors to implant and seek
  reimbursement for, doctors would incur a substantial financial loss
  with every purchase of the Device, thereby making it more difficult for
  STIMWAVE to sell the Device to doctors and medical providers at the
  approximately $16,000 price.

  However, STIMWAVE -- at the direction of PERRYMAN -- did not lower the
  price of the Device so that its cost to doctors and medical providers
  could be covered by reimbursement for the implantation of only the
  Lead, nor did PERRYMAN recommend that doctors not implant the Device or
  its receiver component in cases where the Pink Stylet could not fit
  comfortably.  Instead, PERRYMAN directed that STIMWAVE create the White
  Stylet -- a dummy component made entirely of plastic that served no
  medical purpose but which STIMWAVE misrepresented to doctors as a
  customizable receiver alternative to the Pink Stylet.  The White Stylet
  could be cut to size by the doctor for use in smaller anatomical spaces
  and was created solely so that doctors and medical providers would
  continue to purchase the Device for use in those scenarios and continue
  to bill for the implantation of a receiver component.  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.  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.

  As a result of these misrepresentations regarding the functionality of
  the White Stylet, PERRYMAN caused doctors and medical providers to
  unwittingly implant the non-functional White Stylet into patients and
  submit fraudulent reimbursement claims for implantation of the White
  Stylet to Medicare, resulting in millions of dollars in losses to the
  federal government.

  On June 15, 2022, STIMWAVE filed for bankruptcy in Delaware under
  Chapter 11 of the Bankruptcy Code, through which it sold substantially
  all of its assets to a third-party through an auction.

                    *                *                *

  PERRYMAN, 54, of Delray Beach, Florida, has 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 10
  years in prison.

  The maximum potential sentences are prescribed by Congress and are
  provided here for informational purposes only, as any sentencing of the
  defendant will be determined by the judge.

  Mr. Williams praised the investigative work of the FBI and thanked the
  FDA for its assistance.

  The criminal case is being handled by the Complex Frauds and Cybercrime
  Unit of the Office's Criminal Division.  Assistant U.S. Attorneys Louis
  A. Pellegrino, Jacob M. Bergman, and Mónica P. Folch are in charge of
  the prosecution.  The civil case against STIMWAVE and PERRYMAN is being
  handled by the Civil Frauds Unit of the Office's Civil Division.
  Assistant U.S. Attorneys Jacob M. Bergman and Mónica P. Folch are in
  charge of the civil case.

  The charges contained in the Indictment are merely accusations, and the
  defendant is presumed innocent unless and until proven guilty.
  _______________________

  [61][1] As the introductory phrase signifies, the entirety of the text
  of the Indictment constitutes only allegations, and every fact
  described herein should be treated as an allegation.
  Attachment(s):
  [62]Download U.S._v._Perryman_Indictment.pdf
  [63]Download Stimwave_Non-Prosecution_Agreement.pdf
  [64]Download Stimwave_Complaint.pdf
  [65]Download Stimwave_Settlement.pdf
  Topic(s):
  Health Care Fraud
  Component(s):
  [66]USAO - New York, Southern
  Contact:
  Nicholas Biase (212) 637-2600
  Press Release Number:
  23-094
  Updated March 9, 2023
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References

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105. https://www.justice.gov/usao-sdny
106. https://www.justice.gov/file/1200951/download
107. http://www.nysd.uscourts.gov/events-exhibits.php
108. https://www.justice.gov/usao-sdny/programs
109. https://www.justice.gov/usao-sdny/reentry-program
110. https://www.justice.gov/usao-sdny/programs/community-outreach
111. https://www.justice.gov/usao-sdny/programs/victim-witness-services
112. https://www.justice.gov/usao-sdny/employment
113. https://www.justice.gov/usao-sdny/benefits
114. https://www.justice.gov/usao-sdny/diversity
115. https://www.justice.gov/usao-sdny/assistant-usa-employment
116. https://www.justice.gov/usao-sdny/support-staff
117. https://www.justice.gov/usao-sdny/law-student-internships
118. https://www.justice.gov/usao-sdny/undergraduate-internships
119. https://www.justice.gov/usao-sdny/monitors-receivers-claims-administrators
120. https://www.justice.gov/usao-sdny/contact-us
121. https://www.justice.gov/usao-sdny/report-crime
122. https://www.justice.gov/usao-sdny/civil-rights

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