CA Woman Admits to Defrauding Medtronic of $2.1M

Jennifer Rutherford admitted to creating shell companies that sold non-existent marketing merchandise to Medtronic, thereby defrauding the company of at least $2.1 million.

Jennifer Rutherford, 40, of San Jose, California, on Thursday pleaded guilty to one count of wire fraud in connection with a scheme in which she defrauded Fridley-based Medtronic, Inc., of at least $2.1 million.

According to the U.S. Attorney's Office in Minnesota, Rutherford worked as a senior marketing manager at Kyphon, Inc., which was acquired by Medtronic in July 2007.

In her role, Rutherford was responsible for selecting vendors to supply marketing merchandise-including key chains, baseball caps, and T-shirts-that company representatives could distribute at trade shows and industry conferences.

According to her plea agreement, Rutherford created three shell companies and then pretended to buy marketing merchandise from those companies. After that, she allegedly submitted invoices to Medtronic to receive payment for the merchandise, which never existed.

Medtronic paid at least $2.1 million for the non-existent merchandise, and Rutherford kept the money for her personal use, according to the U.S. Attorney's Office.

Rutherford-who was charged in May-faces up to 20 years in prison for the single count she faces. U.S. District Court Judge Patrick J. Schiltz will determine her sentence at a yet-to-be-scheduled hearing.