Former Kyphon Marketing Manager sentenced to 45 months jail time for operating fake supply company

Former Kyphon Marketing Manager Sentenced to Jail (Walter Eisner @ OTW)

Jennifer Rutherford, the former senior marketing manager for Kyphon, Inc. who pled guilty last July to defrauding the company out of millions of dollars, has been sentenced in a Minnesota federal court to 45 months in prison.

Rutherford admitted orchestrating a scheme between June of 2004 and June of 2009 whereby she created sham companies that sold non-existent merchandise to Medtronic, Inc. Medtronic acquired Kyphon in July of 2007.

According to a U.S. Department of Justice statement on April 27, Rutherford was responsible for selecting vendors to supply marketing merchandise that company representatives could distribute at trade shows and industry conferences, such as key chains, baseball caps, and tee-shirts.

Rutherford, of San Jose, California, admitted creating three shell companies and then pretending to buy merchandise from those companies. Subsequently, she submitted invoices to Medtronic for payment of the goods. However, no merchandise ever existed. The total Rutherford caused Medtronic to pay to her for non-existent merchandise was at least $2.1 million.

That’s a lot of tchotchkes.

It’s not often, in an era of deferred prosecutions, corporate integrity agreements and federal monitors at orthopedic device companies, that we see someone actually do hard time for cheating about alleged services and products rendered.


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