Fake plastic medical devices were implanted into people with chronic pain. It was part of a medical company CEO's scheme to charge $16,000 for each one, feds allege.

• A medical device company sold devices that were implanted into patients with chronic pain, according to prosecutors.
• But, the DOJ alleges that the devices were plastic and didn't do anything.

People with chronic pain were implanted with fake plastic medical devices — and now the former CEO of a healthcare company is under federal indictment.

In newly released court documents, the Department of Justice accuses Laura Perryman, the former CEO of Florida-based company Stimwave, of scheming for years to sell the phony implantable devices and make millions by defrauding Medicare.

Stimwave developed a system that was billed as an alternative to opioids for pain management, federal prosecutors said. It included three components: an electrode array implanted into a patient's body to stimulate nerves, a battery worn externally, and an implantable 9-inch long copper receiver that transmitted energy between the battery and the electrode device.

Stimwave sold the system to doctors, who performed the implanting procedure, for $16,000 a pop.

But, according to court documents, doctors told Perryman that they were having trouble implanting the 9-inch-long receiver into many patients' bodies.

So, Perryman offered them an alternative device that could be cut down to fit more easily into patients' bodies, prosecutors said. But that alternative was just a piece of plastic that had "no medical efficacy at all," according to the DOJ.

Perryman sold the phony device to doctors for $16,000 anyway, racking up millions in profits for her company and defrauding federal healthcare programs in the process, the DOJ alleges.

Court documents allege that Perryman instructed her employees to vouch for the phony devices, despite knowing that they were useless.

Perryman was arrested on Thursday and charged with healthcare fraud, and conspiracy to commit wire fraud and healthcare fraud, according to the press release. She faces up to 30 years in prison.

Meanwhile, Stimwave agreed to pay $10 million in penalties, cooperate with the federal investigation, and create new procedures to make sure its in compliance with the law, the Department of Justice said.