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Ex-Starkey executive, associate guilty in embezzlement case

March 8, 2018

MINNEAPOLIS (AP) — A former executive at hearing aid manufacturer Starkey Laboratories and a business associate were convicted Thursday in a $20 million embezzlement case, while two other defendants were acquitted.

The Star Tribune reported former Starkey Laboratories president Jerry Ruzicka and W. Jeff Taylor, former president of Starkey supplier Sonion, were found guilty on fraud charges for their roles in the scheme. Prosecutors said the two men conspired to steal more than $15 million in stocks, bonuses and commissions from Starkey, owner Bill Austin, and Sonion over 10 years.

Defense attorneys argued Ruzicka had Austin’s permission to conduct business on his behalf. Austin testified Ruzicka didn’t have the authority to make all the deals he did.

Before the verdict was read, Ruzicka said: “Maybe this will go the way it’s supposed to.” He and his attorney had no comment following the verdict.

Former Starkey human resources chief Larry Miller and business associate Larry Hagen were acquitted by a federal jury on Thursday. Two other defendants — former finance chief Scott Nelson and former subsidiary president Jeffrey Longtain — pleaded guilty earlier and testified during the nearly six-week trial.

The government spent a year investigating Austin’s claims that something was amiss at his company. Austin had been searching for information about Ruzicka’s possible disloyalty, but instead found evidence of embezzlement and called authorities. Prosecutors said the men used various tactics to steal the money, including controlling a web of sham companies.

Among other things, prosecutors said Ruzicka and Taylor controlled a dummy entity that Taylor said was a Starkey affiliate in order to get discounted pricing on hearing aid components. Ruzicka and Taylor then bought the discounted products and later re-sold them to other manufacturers to get illicit profits.

U.S. Attorney Gregory Brooker said in a statement that the men were motivated by “pure greed.”

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Information from: Star Tribune, http://www.startribune.com

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