Updated December 27, 2018
Former Starkey President Jerry Ruzicka was sentenced to 7 years in prison, while Ruzicka’s friend and business associate, Jeff Taylor, the former president of Sonion, received an 18-month sentence, according to an article in the December 21 edition of the Minneapolis Star Tribune by Dee DePass. Federal prosecutors had been seeking a 15-20 year prison term for Ruzicka and 7-9 years for Taylor for charges that included transferring restricted stock, creating sham companies, and collecting around $20 million in fake invoices, bonuses, and commissions in what has been described as a complicated and sophisticated scheme.
Ruzicka was found guilty of 8 out of the 25 counts against him, including tax fraud, stealing a company car, and wire and mail fraud. Taylor was found guilty of 3 out of the 16 counts against him, including mail fraud and wire fraud.
According to the Star-Tribune article, Judge John Tunheim said of Ruzicka, “I think in many respects you are a good person. You helped a lot of people, and in many ways you are responsible for Starkey’s success over the years because of your leadership. But obviously things went too far, and we have to respect the jury’s decision.”
Ruzicka, 62, declined to comment when asked if he had anything to say to the court, and he has continued to contend that his actions were known to Starkey Founder and CEO Bill Austin. He has requested to serve his sentence at a minimum-security prison in Duluth, Minn, a request the judge took under consideration, and will begin his sentence on March 11.
Former CFO Scott Nelson received a 24-month sentence for defrauding Starkey Hearing Technologies of nearly $20 million, while Jeffrey Longtain, the former president of Starkey subsidiary Northland Hearing, received one year of probation. Nelson had pleaded guilty to conspiracy and Longtain had pleaded guilty to tax evasion. Both cooperated with authorities and testified against their former bosses.
Appeals withstanding, the sentencing likely draws the curtain on a particularly ugly case that featured several prominent figures in the US hearing industry.
Taylor, Nelson, and Longtain all took responsibility for their actions and expressed remorse. According to the Star-Tribune article, Taylor was teary-eyed and expressed regret, saying “I’ve lost nearly everything, and I will pay for that for the rest of my life.” Similarly, Longtain said, “I want to apologize to Bill Austin and all the employees I have betrayed. I’m here because of what I did, the actions I committed. If I had done the right thing, I would not be standing here today.”
Wrote Thomas Ting, the General Counsel for Starkey, in a statement forwarded to The Hearing Review, “We are immensely proud of Starkey’s 6,000 employees who are stronger than ever and whose steadfast dedication to Starkey’s purpose of helping people and continued innovation has never wavered,” “Despite the distractions, the Starkey team came together in an historic way to innovate our industry by releasing a revolutionary hearing aid. Thank you to the US Attorney’s Office, FBI, IRS, and Postal Inspector for tirelessly seeking justice.”
To read more on the sentencing, click here.
- Prosecutors Seek Lengthy Prison Terms for Ruzicka and Taylor for Defrauding Starkey
- Starkey Trial: Jury Finds Ruzicka and Taylor Guilty; Miller and Hagen Not Guilty
- Ugly Starkey Trail Gets Uglier; Closing Arguments Expected This Week
- Trial Against Former Starkey Executives, Associates, Begins; Defense Strikes Back
- Starkey Ex-CFO Scott Nelson Pleads Guilty to Conspiracy
- New Court Filing Includes Allegations Against Starkey Founder Bill Austin
- Former Starkey Northland COO Charged with Tax Evasion
- Tax Violations Added to Charges Against Former Starkey Executives
- Four Defendants in Starkey Fraud Case Plead Not Guilty
- Five Indicted for $20 Million Fraud Against Starkey
- Ruzicka Files Whistleblower Lawsuit Against Starkey
- FBI Investigation Focuses on Fired Employees, Says Starkey
- Blog: Turmoil at Starkey Leads to Market Analysts’ Talk About Aquisition
- Lawsuit Filed Against Starkey Sheds Light on Recent Firings
- Jerry Ruzicka and Three Other Senior Executives Leave Starkey