Former Starkey Executive Charged in Federal Court Sues Company Over Legal Fees

Jerry Ruzicka Photo: File photo
Jerry Ruzicka

December 05, 2017 05:36 PM

The former president of Starkey Laboratories Inc., who has pleaded not guilty to charges of stealing more than $20 million from the company, is suing the company over the legal fees he's incurred.

Jerry Ruzicka alleges he had authority to carry out the actions he is accused of taking. He was one of the high-level employees fired in 2015 in what they claimed was a retaliatory move by the company's CEO, William Austin. 

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RELATED: New Charges Against 2 Former Starkey Executives

They were first charged in federal court in September of 2016.

According to that indictment, Ruzicka and others conspired to embezzle from Starkey and Sonion from 2006 to September of 2015. Starkey is a hearing aid manufacturer, and Sonion is a major supplier of hearing aid components.

RELATED: Starkey Settles with 2 Former Employees who Filed Wrongful Termination Suits

Prosecutors allege the defendants used a variety of methods to steal from the companies, including controlling a complicated web of sham companies and dummy entities, awarding themselves restricted stock in Starkey’s retail affiliate and embezzling from the company.

Between that indictment and one filed in January of this year, Ruzicka is currently charged with filing a false tax return, conspiracy to commit mail and wire fraud, mail fraud, wire fraud, conspiracy to commit money laundering and financial transactions involving fraud proceeds. A number of those include multiple counts.

RELATED: 5 Executives Indicted, Accused of $20 Million Fraud Against Starkey Laboratories

But Ruzicka, who also filed a wrongful termination lawsuit against the company, alleges he had the authority to undertake the transactions that resulted in his criminal prosecution.

"Ruzicka is charged with offenses that hinge upon the claim that he undertook transactions, while president, without the authority to do so, and while concealing them from Austin," the lawsuit states.

"Ruzicka had the authority for each and every action he undertook at Starkey. Ruzicka's authority is granted by the bylaws of Starkey, the course of dealing over 38 years, and/or the explicit instructions of Austin," it continues.

His lawsuit alleges he is entitled to "indemnification and advance payment of all attorneys' fees and expenses incurred for representation of Ruzicka with respect to covered criminal proceedings, and this action."

In a statement, a spokesperson for Starkey said the lawsuit is completely without merit.

"Mr. Ruzicka has been charged with stealing millions of dollars from our company and is now asking us to pay for his criminal defense," the statement read. "The irony is not lost on us, and we're confident that the court will conclude – as our special counsel did – that forcing the victim to pay the criminal's legal bills is unjust and unwarranted."

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Frank Rajkowski

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