Former Starkey Executive Pleads Guilty To Filing False Tax Return

Former Starkey Executive Pleads Guilty To Filing False Tax Return Photo: KSTP

April 20, 2017 10:11 PM

A former Starkey executive has pleaded guilty in U.S. District Court to filing a false tax return.

The U.S. Attorney's Office said Jeffrey Lee Longtain entered his plea before U.S. District Judge John Tunheim in Minneapolis.


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According to a release from the U.S. Attorney's Office, Longtain was the chief operating officer and president of Northland Hearing Centers, Inc., a subsidiary of Starkey Labratories, from 2006 until his termination in 2015.

The guilty plea and documents filed in court state that Longtain reported to Starkey President Jerome Ruzicka and worked with the company's chief financial officer Scott Nelson. The U.S. Attorney's Office release alleges that in 2006, Ruzicka and Nelson forged the signature of Starkey's principal owner William Austin to transfer Northland LLC's assets to a new entity they controlled, Northland Hearing Centers, Inc.

RELATED: Five Accused In Starkey Fraud Case Claim Company's CEO Knew Of Defendants' Dealings

The U.S. Attorney's Office alleges they later awarded themselves stock and paid both themselves and Longtain around $15 million in exchange for terminating the restricted stock grants.

Longtain's guilty plea and court documents state that in 2014, realizing they had not taken enough money to cover their entire tax obligations, the three took additional money from the company.

The U.S. Attorney's Office alleges Longtain told Nelson he needed $115,000 to cover additional tax payments, though he only needed $85,000 and asked for the higher amount to keep $30,000 for himself. The U.S. Attorney's Office release also states that Nelson and Longtain disguised the $115,000 payment as a loan.

But that it was, in reality, income that should have been reported on his 2014 tax returns.

Longtain's guilty plea and court documents allege that between 2010-15, Longtain purposely failed to report money he received from Starkey and Northland, as well as other companies that provided services to Starkey and Northland, as income on his tax returns.

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

Ruzicka, Nelson and three others have been charged with stealing more than $20 million from Starkey. That trial is scheduled to begin July 24.

Ruzicka and Nelson have also been charged with lying on their tax returns.


Frank Rajkowski

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