starkey president prison sentence

Former Starkey President Sentenced to 7 Years in Prison; Former CFO gets 24 Months

MINNEAPOLIS, MINNESOTA — Former Starkey President, Jerry Ruzicka, was sentenced to 7 years in prison on December 19, 2018, for the embezzlement of nearly $20 million from Starkey Hearing Technologies. The sentence was much less than the 15 to 20 years prosecutors had asked for, and also includes a year of probation, fines and restitution.

According to U.S. District Judge John Tunheim, who was quoted in the Star Tribune as saying to Ruzicka, “You helped a lot of people, and in many ways you are responsible for Starkey’s success over the years because of your leadership. But obviously things went too far, and we have to respect the jury’s decision.”

Ruzicka’s lawyer, John Conard, told the judge he was thankful for the lesser sentence but will seek appeal on behalf of his client. 

The charges against Ruzicka included:

  • Theft of $15.5 million of restricted stock from Starkey subsidiary Northland Hearing, which belonged to owner Bill Austin.
  • Filing false 2014 tax return
  • Stealing his 2011 company car
  • Devising a scheme to hide $1.9 million in bonuses for himself and others
  • Creating fraudulent companies in order to collect hundreds of thousands of dollars in fake commissions or fees from Starkey and its supplier Sonion

Judge Tunheim was said to have reduced some of the fraudulent losses Ruzicka was accused of. “The evidence goes both ways,” the judge is quoted of saying, “I simply find it would not be fair given the significant number of acquittals”. However, even after adjustment, Ruzicka is responsible for Starkey and its supplier, Sonion, suffering $19 million in losses.

“It is unfortunate that Ruzicka misused his position of trust over a period of years to steal millions from a company that does so much to give the gift of hearing to so many people in need. Corporate fraud has far-reaching negative effects on so many institutions and individuals and that’s why the FBI continues to work tirelessly with our criminal justice partners to detect corporate fraud and hold those responsible to account for their crimes.”

–Jill Sanborn, Special Agent in Charge of the FBI Minneapolis Division

Ruzicka is due to report to prison on March 11, 2019.

 

Other Former Executives Sentenced

 

Former Starkey CFO, Scott Nelson was in court on December 20 and received a 24 month prison sentence following his guilty plea to one count of conspiracy in the fraud scheme against Starkey.

Jeffrey Longtain, who plead guilty last year to tax evasion and agreed to testify in the case, was sentenced to a year of probation.

The former president of Sonion, Jeff Taylor, who was convicted earlier this year on one count of mail fraud and two counts of wire fraud, received an 18 month sentence and two years of probation. 

 

Source: US DOJ, Minneapolis Star Tribune, MSP Business Journal


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