Former President Of Billionaire-Owned Hearing Aid Manufacturer Sentenced To 7 Years In Prison

By | December 19, 2018

Jerry Ruzicka in 2006 at Starkey Hearing Technologies in Eden Prairie, Minnesota. Ruzicka was sentenced to seven years in prison Wednesday.Glen Stubbe/ZUMA Press/Newscom

The former president of billionaire-owned Starkey Hearing Technologies, Jerry Ruzicka, was sentenced to seven in prison inside a Minneapolis courthouse Wednesday. It was the culmination of a saga that transpired over more than three years at America’s largest hearing aid manufacturer, and was chronicled in a story published in Forbes earlier this year.

The court will also issue Ruzicka a restitution order, according to a statement from the U.S. attorney’s office.

Ruzicka, the longtime president at Starkey, the chief financial officer Scott Nelson and the senior vice president of human resources Larry Miller were ousted from their executive level positions by billionaire owner Bill Austin in September 2015. A year later they were charged, along with Lawrence Hagen, a former Starkey employee who once sold a company to Austin, and W. Jeffrey Taylor, the former president of a Starkey supplier, with participating in a scheme to steal over $ 15 million from Starkey and Austin.

Starkey Hearing Technologies owner, billionaire Bill Austin, in 2014 at company headquarters in Minnesota.Adam Bettcher/Getty Images for Starkey Hearing Foundation

Starkey’s former CFO Scott Nelson pleaded guilty to one charge of conspiracy a year ago in December 2017, and a trial for the others began in January. It lasted six weeks, and in March Ruzicka and Taylor were convicted on charges of fraud, while the jury acquitted Hagen and Miller.

Since Ruzicka was convicted, his attorney has continued to fight the jury’s decision in court filings statingas he did throughout the trialthat Austin knew all along what was going on.

According to court filings, prosecutors had asked for 15 to 20 years for Ruzicka. His attorney had requested probation or home confinement.

In a separate case, Jeffrey Longtain, the COO and president of a Starkey subsidiary, was charged with filing a false tax return in March 2017; he pleaded guilty and is scheduled to be sentenced Thursday along with Taylor and Nelson.

According to a statement released by the U.S. Attorney’s Office in Minnesota, U.S. attorney Erica H. MacDonald said in announcing Ruzicka’s sentencing Wednesday: “The defendant served as the President of Starkey Laboratories and had the confidence and trust of the company’s owner and its employees. Mr. Ruzicka abused that trust when he stole millions of dollars through a brash and complex fraud scheme. The sentence imposed today marks the end to a long and meticulous investigation and trial.” 

Starkey Hearing Technologies, based in Minneapolis suburb, Eden Prairie, is considered to be one of the “Big Six” hearing aid manufacturers in the world and is the only one with headquarters in the U.S. Privately-held Starkey does not disclose its revenues, but earlier this year Forbes estimated that Starkey had annual sales of some $ 850 million.

“With the sentencing today and others to come, we are thankful to be nearing the conclusion of this matter. We are continuing to focus on the bright future of our business,” said Starkey’s general counsel Thomas Ting in a statement emailed to Forbes

Ruzicka’s attorney did not respond to a request for comment in time for publication.

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