MINNEAPOLIS, MINNESOTA — The $20 million embezzlement trial involving former Starkey executives took yet another twist this week when U.S. District Court Judge John Tunheim ruled Tuesday that Starkey Laboratories owner Bill Austin perjured himself at least once in his testimony earlier in the trial.
The testimony in question, regarding the perjury allegations against Austin, involved whether Austin truthfully testified that he had not shredded payroll documents, and if he had correctly stated the circumstances and timeline regarding Ruzicka’s employment contract.
The perjury allegations were one of many notable occurrences this week in the trial. The week got off to an auspicious start when, in a surprise move, Jerry Ruzicka and former CEO Larry Miller abruptly rested their cases Monday without calling any witnesses. Ruzicka’s attorney, John Conard, said in the motion that the government had not adequately proved its case and asked Tunheim to acquit his client, Ruzicka. By late Monday evening, the three other defendants joined Conard’s motion.
On Tuesday, former Sonion president, Jeff Taylor took the stand in his own defense. Taylor is accused of working with Ruzicka and another defendant, Larry Hagen, to create sham companies that issued more than $7.7 million worth of fraudulent commissions, rebates and discount pricing. But the real bombshell on Tuesday was perjury allegations leveled at Austin that he did not truthfully testify about the shredding of payroll documents, and that he did not correctly state the circumstances and timeline of Ruzicka’s employment contract.
According to the Minneapolis Star Tribune firsthand account of the trial, in the first instance of suspected perjury, Austin and Federal Bureau of Investigation special agent Brian Kinney gave contradictory statements under oath. Kinney said that during a formal interview with Austin, the Starkey owner said he shredded descending payroll reports — which list employees and their pay, ranked from the highest to lowest salaries — after reviewing them. Kinney had used this information for a search warrant to further investigate the case.
Under questioning from the prosecution, however, Austin said he “never shredded anything” and did not recall telling Kinney that. Austin also said he always put the documents in the recycling bin, even those containing confidential information.
Judge Tunheim said the prosecution should know that either Kinney or Austin gave a false statement. He added that “whether Austin destroys documents is a contentious factual issue that was explored throughout this case. This statement is directly relevant to that issue.”
In reference to Ruzicka’s contract, Tunheim went on to state, “This is not a mere failure to recall who drafted the amendment to the contract and when. Austin testified at length and in great detail about the creation of this amended contract. Documentary evidence — as testified to by Snell — establishes that it is impossible for Austin’s story to be true.” Tuesday’s full account on the trial can be found here.
Honest Confusion or Perjury?
During Wednesday’s deliberations, Judge Tunheim decided that two statements he highlighted in a Tuesday ruling, in which he found that Starkey owner Bill Austin had perjured himself, would be struck from the official trial record. However, he said he would not instruct the jury about the perjury allegations. Tunheim reiterated his belief that Austin was untruthful on the witness stand when describing the circumstances surrounding Ruzicka’s employment contract and an addendum to that contract.
Tunheim reiterated his belief that Austin was untruthful on the witness stand when describing the circumstances surrounding Ruzicka’s employment contract and an addendum to that contract. Austin had said Ruzicka discussed with him what would be in the contract, then went back and wrote it up and brought it back for a signature – all within one day. Austin said the same thing happened with the addendum to the contract. The FBI, however, had e-mails between attorneys for Starkey that contradict Austin’s account on the stand.
Prosecutors, in a motion asking Tunheim to reverse the ruling, said Austin did not perjure himself but had “honest confusion” about the contract process and that Austin was talking about his general assumptions, not definitive details.
Wednesday also saw the close of defense testimony, as Taylor finished his time on the stand, and Hagen opted not to testify. For a full account Wednesday’s proceedings, go here.
Source: Dee DePass, Minneapolis Star Tribune
Post-publication update: Starkey Hearing Technologies’ former president, Jerry Ruzicka, was found guilty on March 8, 2018 in the $20 million federal fraud trial. In a split decision, W. Jeff Taylor, former president of Sonion was also found guilty in 3 of 16 counts against him, while Larry Miller and Larry Hagen were found not guilty. Read the latest details on the verdict here.