Minnesota Woman Pleads Guilty in $2 Million Counterfeit Medical Devices Case

MINNEAPOLIS - Tammy Wadsworth, age 63, pled guilty today to possessing altered, forged, or counterfeit medical products, announced Acting U.S. Attorney Joseph H. Thompson. Wadsworth, the founder of a pain clinic, defrauded more than a dozen franchise owners through a sophisticated fraud scheme involving microcurrent therapy provided at franchise treatment centers across the United States. She then attempted to conceal her fraud scheme by laundering significant portions of the money she fraudulently obtained from franchise owners.

"Wadsworth is a modern-day snake oil salesman," said Acting U.S. Attorney Joseph H. Thompson. "Fraud that exploits families searching for answers is among the most shameless crimes we see. It is theft dressed up as innovation. Wadsworth now joins the long line of Minnesota fraudsters who will see federal justice."

Wadsworth is the founder and owner of Pain, Injury and Brain Centers of America ("PIBCOA"). PIBCOA was a Minnesota limited liability company located in Winona, Minnesota. PIBCOA had clinics and offices throughout the United States.

Wadsworth and PIBCOA claimed to provide a treatment called "A.I. Myoneurvascular Therapy" that, using artificial intelligence and low voltage electricity, would restore degenerative cells to healthy, fully functioning cells. This claim was false. The treatment involved the application of electrodes to the patient's skin that, when the system was turned on, would deliver various levels of electrical currents to the patient. Wadsworth falsely claimed that A.I. Myoneurvascular Therapy could be used to treat virtually any type of disease, disorder, or condition with a 95% success rate, including Lupus, Crohn's Disease, Depression, Infertility, Parkinson's Disease, Alzheimer's Disease, Multiple Sclerosis, and Autism.

Starting in May 2017, Wadsworth devised a scheme to recruit franchise owners to open clinics and provide A.I. Myoneurvascular Therapy to patients around the country. Wadsworth pitched franchise owners with her false claims that A.I. Myoneurvascular Therapy was "state-of-the-art technology" that "treats the untreatable."

Wadsworth trained franchisees on use of PIBCOA's equipment and treatment and sold them expensive medical devices and gels that Wadsworth claimed were developed solely for PIBCOA to provide A.I. Myoneurvascular Therapy. In reality, the devices Wadsworth sold to franchise owners had serial numbers, manufacturer information, and product information removed or covered up. Wadsworth refaced the equipment and replaced the manufacturer's label with a PIBCOA label to pretend that it was her own. Additionally, PIBCOA's A.I. Myoneurvascular Therapy was not only unsuccessful in treating the diseases and conditions as promised by Wadsworth, but in many cases, the treatment caused injuries to the franchise owners and patients, including burns, scars, and severe nausea.

Wadsworth promised the franchise owners a "great source of revenue." Wadsworth charged franchise owners between $60,000 and $250,000 to open PIBCOA franchises. After discovering Wadsworth's false representations both with respect to the equipment they purchased and the use of such equipment to treat patients, all the franchise owners were forced to shut down their businesses. Many incurred substantial financial losses.

In total, the defendant's actions caused $887,061 in actual loss and as much as more than $2 million in total loss to PIBCOA franchise owners, including payments directly to Wadsworth for equipment, royalties, and franchising costs as well as financial losses associated with the closure of franchisees' unsuccessful PIBCOA businesses. She primarily used the money to purchase real estate, including a house in Nevada, a Mercedes Benz, and fund her extravagant lifestyle.

Wadsworth pled guilty today. She will be sentenced at a later date.

"U.S. consumers rely on the FDA to ensure that their medical devices are safe and effective and bear true and accurate labeling for their intended uses," said Special Agent in Charge Ronne Malham of the FDA's Office of Criminal Investigations Chicago Field Office. "We will continue to investigate and bring to justice those who threaten the health of consumers by evading federal requirements."

This case is the result of an investigation conducted by the FDA Office of Criminal Investigations.

Assistant U.S. Attorney Rebecca E. Kline is prosecuting the case.