Jury convicts former Starkey executive, business associate in fraud scheme

A former president of hearing aid manufacturer Starkey Laboratories and a business associate were found guilty Thursday on multiple counts in connection with a scheme to steal more than $15 million from the company.Two other defendants were acquitted. 

Prosecutors accused Jerome Ruzicka, the former president of Starkey Laboratories, W. Jeff Taylor, former president of Starkey supplier Sonion, of stealing money from the Eden Prairie-based company by setting up shell companies and paying themselves consulting fees, commissions and stock options. The fraud occurred between 2006 and September 2015. 

According to the indictments, Ruzicka used $200,000 of the money he embezzled from Starkey to pay his state and federal income taxes. He also used Starkey funds to purchase a Jaguar for $119,188 and then transferred ownership of the car from Starkey to himself by signing the title as both representative of the seller and as the buyer.

“It was pure greed that motivated these defendants,” United States Attorney Gregory G. Booker said in a statement. 

Starkey terminated Ruzicka in September 2015 after details of the scheme were discovered. Taylor was also terminated by Sonion. 

Ruzicka was convicted of four counts of mail fraud, three counts of wire fraud and one count of tax fraud. Taylor was convicted on two counts of wire fraud and one count of mail fraud. 

“As proven at trial, defendants Jerry Ruzicka and W. Jeff Taylor misused their extensive corporate knowledge and positions of trust over a period of years to steal millions from Starkey Laboratories,” Acting Special Agent in Charge Robert C. Bone II of the FBI Minneapolis Division said in a statement. “Corporate fraud such as this not only negatively impacts individual companies and institutions but risks overall stability of the marketplace as fraud losses accumulate.”

Lawrence Miller, the former senior vice president of human resources for Starkey, and Larry Hagan were acquitted. 

Starkey Laboratories, Inc. statement 

Jon Austin, a spokesperson for Starkey, issued the following statement in response to the verdict. 

"Today's verdict, along with two earlier guilty pleas, affirms that our company was victimized over a period of years and that millions of dollars were stolen. We're grateful to the jury and to the U.S Attorney's office, and to the FBI, IRS, and Postal Inspector case agents for their efforts in presenting and evaluating a very complex and convoluted web of deception. This decision closes a chapter in our history and lets us focus the entirety of our attention on our employees and the company's future, on the customers we serve around the world and on their patients who depend on us for better hearing.”