Jerry Ruzicka, Corporate Fraud, Minnesota 2023

Former Starkey President Jerry Ruzicka and business associate Jeffrey Taylor have been found guilty of perpetrating a massive fraud against Starkey Laboratories, a leading manufacturer of hearing aid components.

According to the investigation, between 2006 and September 2015, Ruzicka and Taylor schemed to embezzle and misappropriate money and business opportunities belonging to Starkey and its supplier, Sonion.

The defendants controlled a dummy entity, Archer Acoustics, and used it to purchase discounted products from Sonion, which they later resold to other manufacturers to obtain illicit profits. They also obtained at least $600,000 in profits, commissions, and rebates by fraudulently leveraging Starkey’s purchasing power for their own benefit.

Ruzicka and Taylor used various tactics to steal from Starkey, including controlling a complicated web of sham companies and dummy entities, and surreptitiously awarding themselves restricted stock in Starkey’s retail affiliate.

Former Starkey Chief Financial Officer Scott Nelson and another former Starkey executive, Jeff Longtain, had previously pleaded guilty in connection with this case.

U.S. District Court Chief Judge John Tunheim presided over the trial, which lasted nearly six weeks in Minneapolis.

The investigation was led by the FBI, IRS, and U.S. Postal Inspection Service, which meticulously uncovered the depth of the fraud and presented the complex case to the jury.

The jury was able to cut through the complexity and distractions and get to the truth, convicting Ruzicka and Taylor of their crimes.

The victims in this case, including Starkey’s owner William F. Austin, the employees of Starkey, and the Sonion Company, cooperated fully with the prosecution and are commended for their cooperation.

Ruzicka and Taylor face significant prison time for their crimes, which carried a total value of over $15 million. Their exact sentence will be determined at a later date.

This case serves as a reminder of the importance of corporate accountability and the need for law enforcement agencies to work together to detect and prevent corporate fraud.