Minnesota Woman Pleads Guilty in $2 Million Counterfeit Medical Device Scheme

Sep 18

A Minnesota woman has admitted to running a nationwide fraud scheme that federal prosecutors say caused millions in losses through the sale of counterfeit medical devices.

Tammy Wadsworth, 63, pled guilty Wednesday in federal court to possessing altered, forged, or counterfeit medical products which she claimed could cure serious illnesses and diseases.

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Wadsworth, the founder of Pain, Injury and Brain Centers of America, operated out of Winona and expanded her franchise model to sites across the country starting in 2017. Prosecutors say she recruited franchise owners with promises of “state-of-the-art” artificial intelligence therapy that could “treat the untreatable.”

According to the plea agreement, Wadsworth claimed her system, marketed as “A.I. Myoneurvascular Therapy,” could restore cells and cure conditions ranging from Alzheimer’s and Parkinson’s to lupus, infertility, multiple sclerosis and autism. Franchise owners paid between $60,000 and $250,000 to open clinics, buy medical devices and gels, and receive training on how to market and administer the treatments.

The devices sold to franchisees were not unique, investigators found. Serial numbers and manufacturer labels had been removed and replaced with her own branding. Federal prosecutors said the treatments not only failed to cure conditions as promised, but in some cases left patients injured, suffering burns, scarring and nausea.

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Authorities said Wadsworth defrauded more than a dozen franchise owners, who ultimately had to close their businesses after learning the devices were counterfeit and the treatment ineffective. The actual losses were tallied at $887,061, though total losses exceeded $2 million when factoring in royalties, franchise fees and business closures. Many of the defrauded owners reported significant financial hardship after the collapse of their operations.

Court filings show Wadsworth used the money to fund a lavish lifestyle, buying real estate including a house in Nevada, purchasing a Mercedes Benz and spending heavily on personal expenses. She also laundered proceeds in an attempt to conceal the fraud.

Acting U.S. Attorney Joseph H. Thompson called Wadsworth “a modern-day snake oil salesman,” saying she targeted families desperate for hope. “Fraud that exploits families searching for answers is among the most shameless crimes we see,” Thompson said in a statement.

The Food and Drug Administration’s Office of Criminal Investigations led the case, with Special Agent in Charge Ronne Malham noting that federal oversight is critical to protecting patients from unsafe and mislabeled medical devices.

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