Former Marketing Manager at Kyphon pleads guilty to federal fraud charges |

Former Marketing Manager at Kyphon pleads guilty to federal fraud charges

Ex-Kyphon Manager Pleads Guilty to Fraud (written by Walter Eisner @ OTW)

A former senior marketing manager for Kyphon, Inc., pled guilty in federal court on July 7 to ripping off Medtronic Inc. for at least $2.1 million.

Jennifer Rutherford was responsible for selecting vendors to supply marketing merchandise that company reps could distribute at trade shows and industry conferences. The merchandise included such items as key chains, baseball caps, and tee-shirts. Rutherford admitted to creating three shell companies from June 2004 to June 2009 and pretending to buy merchandise from those companies. She’d then submit the invoices to Medtronic for merchandise that didn’t exist.

Rutherford’s admission didn’t specify how much merchandise the $2.1 million would have bought, but that’s gotta be a lot of tee-shirts.

A press release from the U.S. Attorney’s Office in Minnesota announced the guilty plea and noted that Rutherford faces a potential maximum penalty of 20 years in prison. The federal judge will determine her sentence at a future hearing, yet to be scheduled.

Medtronic bought Kyphon in 2007. Medtronic has since paid $75 million to settle allegations that Kyphon, before being purchased by Medtronic, caused the submission of false claims to Medicare. The hospitals who submitted the false claims have also paid tens of millions to the government to settle the allegations

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