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Charges: Former Starkey execs and associates stole more than $20M from company

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Starkey campus
Starkey Hearing Technologies' campus is located in Eden Prairie, Minn., photographed July 21, 2015.
Jeffrey Thompson | MPR News file

 Updated: 6:00 p.m. | Posted: 4:55 p.m.

Federal prosecutors have charged five people including three former executives of Starkey Laboratories with stealing more than $20 million from the hearing aid company and its principal owner, William F. Austin. 

Jerry Ruzicka, Scott Nelson, Larry Miller, Jeffrey Taylor and Lawrence Hagen controlled "sham companies and dummy entities" that they used to siphon money from Starkey, Minnesota U.S. Attorney Andrew Luger said in a statement.  

The federal charges range from mail and wire fraud to conspiracy to commit money laundering.

Former president Ruzicka, 59, of Plymouth, Starkey's chief financial officer Nelson, 58, of Prior Lake, and human resources senior vice president Miller, 63, of Chanhassen, were all fired from Starkey last year. 

Ruzicka "abused his authority as president of Starkey ... to orchestrate a multi-faceted scheme to steal more than $20 million" from the company, according to the charges. 

The U.S. attorney's office also says Ruzicka stole a 2011 Jaguar by transferring the title from the company to himself. 

Prosecutors say Taylor, 55, of Cologne, Minn., and Hagen, 63, of Minnetonka, were both friends of Ruzicka. Taylor has worked as president of Sonion U.S., a hearing-aid component firm. Hagen worked two stints at Starkey between 1982 and 2005.

Nelson allegedly exploited his post to embezzle millions of dollars from the company, and used company funds to buy a condo, the charges said. 

Miller made false payroll reports to hide the embezzlement from Starkey owner Austin, including Miller's own bonuses, court documents say. He worked at the company 1982 through 1986, and 1999 through 2005.

The attorney for Ruzicka, John Conard responded in an emailed statement his team was still reading through the indictment, but said his client "built the company back from the ashes as president, beginning in 1998.  He has done nothing wrong."   

Starkey Hearing Technologies spokesman Jon Austin released a statement, "To say that we're shocked by the betrayal and breach of trust described in today's federal grand jury indictments would be an understatement."  Austin added, "As the victim, we have been cooperating with the government and will continue to do so." 

Starkey is one of the world's largest hearing aid manufacturers. It's based in Eden Prairie, where many of its 5,000 or so employees work.