California Woman Sentenced For Selling Non-existent Merchandise To Medtronic
MINNEAPOLIS – Earlier today in federal court, a California woman was sentenced for
creating sham companies that sold non-existent merchandise to Medtronic, Inc., defrauding the
Fridley-based company out of millions of dollars. United States District Court Judge Patrick J.
Schiltz sentenced Jennifer Rutherford, age 40, of San Jose, California, to 45 months in prison on
one count of wire fraud in connection to the crime. Rutherford was charged on May 27, 2011,
and pleaded guilty on July 7, 2011.
In her plea agreement, Rutherford admitted orchestrating the scheme between June of 2004
and June of 2009. During that time, Rutherford worked for Kyphon, Inc., which was acquired by
Medtronic, Inc., in July of 2007. Rutherford, a senior marketing manager, 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 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.
This case was the result of an investigation by the Federal Bureau of Investigation. It was
prosecuted by Assistant U.S. Attorney John F. Docherty.