Ex-Starkey execs indicted in $20M embezzlement conspiracy

Published 10:23 am Thursday, September 22, 2016

MINNEAPOLIS— Three former executives of Minnesota-based Starkey Hearing Technologies took part in a conspiracy to embezzle more than $20 million from the hearing aid maker and its principal owner, the U.S. Attorney’s office alleged Wednesday.

According to an indictment, between 2006 and last September, the defendants conspired to embezzle and misappropriate money and business opportunities belonging to Starkey and Sonion, a major supplier of hearing aid components to Starkey. The alleged scheme included a web of sham companies and dummy entities, federal prosecutors said.

“The defendants carried out a complex scheme to accomplish a simple goal: to embezzle funds for their own benefit,” U.S. Attorney for Minnesota Andrew Luger said in a news release.

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The indictment charges former company President Jerry Ruzicka, 59; former Chief Financial Officer Scott Nelson, 58; and former human resources head Larry Miller, 63. It also charges two other men who were business associates of Ruzicka’s: Jeffrey Taylor, 55, who was president of Sonion, and Lawrence Hagen, 63.

Ruzicka’s defense attorney, John Conard, said his client “has done nothing wrong.”

“Jerry Ruzicka started working at Starkey in 1977. He has been dedicated to the company and its employees since his first day,” Conard said in a statement.

The defendants are scheduled to make their initial appearances in U.S. District Court in Minneapolis later this week. It was unclear if the other four defendants have attorneys. A message left for a number believed to be Miller’s was not immediately returned. Phone numbers for the other defendants could not immediately be found.

Ruzicka, Nelson and Miller were among Starkey executives fired from the private Eden Prairie-based company last September.

Starkey said the indictments “describe a web of criminal activity and concealment among former top executives.”

“That description is in marked contrast to our long-held values and those of our separate foundation,” the company said.

Starkey is known for its foundation that hosts annual star-studded charity galas headlined by such celebrities as former presidents Bill Clinton and George W. Bush, Katy Perry and Elton John.

Ruzicka has filed a wrongful termination lawsuit against Starkey, alleging he was fired in retaliation for whistleblower activity. It’s not known what the impact of the indictment will be on the lawsuit, which is scheduled for a mediation session Oct. 31, said Ruzicka’s civil attorney, Marshall Tanick.