2 Convicted, 2 Acquitted in Starkey Trial

March 09, 2018 05:31 AM

Two of the four men on trial on charges related to allegations they conspired to steal more than $20 million from Starkey Laboratories Inc. and its principal owner Bill Austin were found guilty Thursday.

The two others charged were acquitted.


All were accused of conspiring 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: Final Witness for Government Takes Stand in Starkey Trial

After more than a month-long trial, the jury convicted former Starkey president Jerry Ruzicka of four counts of mail fraud, three counts of wire fraud and one count of tax fraud.

He had faced 25 counts in all.

Former Sonion president Jeffrey Taylor was convicted of one count of mail fraud and two counts of wire fraud. He had faced 16 counts in all.

Former Starkey human resources manager Larry Miller and former business associates Larry Hagen were acquitted of all charges against them.

Another former Starkey executive, Scott Nelson, had faced three counts of mail fraud, two counts of wire fraud, one count of transactions involving fund proceeds, one count of making and subscribing a false tax return and one count of willfully aiding and assisting the preparation and presentation of a false income tax return.

As part of an agreement in December, he pleaded guilty to just the conspiracy count.

Another former executive, Jeff Longtain, pleaded guilty to filing a false tax return in April of last year.

Austin released a statement following the verdicts Thursday afternoon:

"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," the statement read. "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."

Prosecutors alleged 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.

In indictments in September 2016 and January 2017, Ruzicka was 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 included multiple counts.

A new indictment last December, however, dropped the total mail fraud counts he was charged with from six to four.

Taylor was originally charged with three counts of mail fraud. But that total dropped to one in the new indictment last December.

Ruzicka, Taylor and Hagen were also charged with money laundering. But after the December indictment, those charges no longer existed.

"It was pure greed that motivated these defendants," U.S. Attorney Gregory Brooker said in a release following the verdicts.

"The FBI, IRS, and U.S. Postal Inspection Service meticulously uncovered the depth of the fraud, which lasted nearly a decade, and the trial team successfully presented the complex case to the jury. The jury was able to cut through the complexity and distractions and get to the truth. I want to also commend the victims in this case, Bill Austin, the employees of Starkey, and the Sonion Company, for their cooperation with this prosecution."  


Theresa Malloy and Frank Rajkowski

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