Federal jurors in Minneapolis Thursday convicted a former hearing aid company executive and one of his business associates in a multi-million dollar fraud scheme.
The jury found former Starkey Laboratories president Jerry Ruzicka guilty of eight counts of fraud. Jeff Taylor, who ran component maker Sonion, was convicted on three counts.
Assistant U.S. Attorney Lola Velazquez-Aguilu said the men embezzled more than $15 million dollars over a decade. Starkey's main owner Bill Austin worked closely with investigators, she said.
"It takes a lot to come forward and report a crime. And throughout the trial, the victims, specifically Mr. Austin and other Starkey employees were subjected to personal attacks," Velazquez-Aguilu said.
The men set up a complex web of sham companies, quietly awarded themselves restricted stock in a retail affiliate and caused payments to the company that were used as hidden bonuses for co-conspirators, according to the indictment.
In a 2014 incident, Ruzicka misappropriated $200,000 from Starkey for "officer's insurance." He then used that money to pay his taxes.
"This verdict sends a clear message that embezzlement and other forms of corporate fraud will be aggressively prosecuted regardless of the perpetrator's position or status," said Assistant U.S. Attorney Benjamin Langner.
A Starkey spokesperson said the company is grateful for the verdict.
Former executives Scott Nelson and Jeff Longtain pleaded guilty and testified against the others.
The jury acquitted two additional defendants — Larry Miller and Larry Hagen.