Ex-Starkey CFO Testifies in Embezzlement Trial of Former Colleagues

February 19, 2018 06:16 PM

The video above aired last week when the Starkey Laboratories owner testified in the trial. 

The former chief financial officer for Starkey Laboratories Inc. took the stand Monday in the embezzlement trial involving four of his ex-colleagues.


Scott Nelson himself was indicted on similar charges in 2016, but pleaded guilty to one count of conspiracy in December of 2017.

RELATED: Former Starkey Executive Pleads Guilty to 1 Count of Conspiracy

Jerry Ruzicka, Larry Miller, Jeffrey Taylor and Lawrence Hagen are standing trial on charges related to allegations that they conspired to steal more than $20 million from Starkey and its principal owner, Bill Austin.

On the stand Monday morning, Nelson testified about a stock option he, Jeff Longtain and Ruzicka reportedly received in 2013 of more than $12 million dollars.

Nelson told prosecutors he altered a 2014 payroll report to conceal the payout - at Ruzicka’s command - after Austin asked to view the report.  Additionally, Nelson alleged Ruzicka authorized the company to give him a $225,000 loan to offset the amount he owed on taxes due to the stock option payment.

RELATED: Starkey Laboratories Owner Wraps Up Testimony

Prosecutors also questioned Nelson about a profit/loss report he authored in January of 2015. Nelson testified he changed the report to reflect 10 percent growth for Starkey instead of 9.2 percent, the actual growth rate for the company.

Nelson said the change was made because Ruzicka had a clause in his contract that triggered a bonus if Starkey’s growth reached 10 percent.

However, during cross-examination, attorneys for the defendants argued Nelson had used a new method to calculate Starkey's growth to arrive at the 9.2 percent figure.  Using Starkey's old, "historically valid" method was the reason for increase to 10 percent, attorneys argued, rather than an ulterior motive.

RELATED: Owner of Starkey Laboratories Spends Second Day on Witness Stand

Attorneys for the defendants also went after Austin's credibility during their cross-examination of Nelson.  The defendants' attorneys questioned Nelson about stories of Austin speaking with a dead deer.  Attorneys also questioned Nelson about Austin's claims he was visited by angels who predicted the exact day and time of his death.

"I think he believed it," said Nelson.

After additional questioning, Nelson confirmed that representatives from a banking institution that did business with Starkey occasionally referred to Austin by the nickname "crazy Uncle Bill."

RELATED: Trial Underway For 4 Executives Accused of Fraud Against Starkey Laboratories

Nelson will again be on the stand when the trial resumes on Tuesday.  The trial is expected to continue into March.


Tim Vetscher

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