Federal prosecutors argued before a judge Thursday that the convictions of Jerry Ruzicka, former Starkey Laboratories president, and a former business associate should stand and that the two should not get the new trials they are demanding.
Ruzicka, who worked for Starkey for 38 years, was convicted in March of stealing $15 million in restricted stock from Starkey's Northland Hearing subsidiary and its majority owner Bill Austin. Ruzicka and W. Jeff Taylor, former president of Sonion, were also convicted of creating three sham companies and orchestrating Starkey and/or Sonion, a Starkey supplier, to pay them hundreds of thousands of dollars in illegal commissions and consulting fees.
The two have filed a flurry of written motions seeking new trials since their convictions in March. They allege that the original trial was full of problems, prosecutorial misconduct and that the government violated perjury rules in the handling of testimony by Austin.
After hearing opposing arguments from the defense and prosecutors Thursday, U.S. District Judge John Tunheim said he would take them under advisement and make a decision soon.
If Ruzicka's conviction stands, he could face 10 or more years in prison. Legal experts not affiliated with the Starkey case also estimate that Taylor could face up to three years in prison.
The case has been closely watched by both businesspeople and lawyers since Ruzicka and others were first charged with embezzling from Starkey, which is based in Eden Prairie and is the largest U.S. hearing aid manufacturer.
In motions filed in April, Ruzicka and Taylor accused the U.S. attorney's office of withholding evidence from the court and wrongly amending Ruzicka's indictment during closing arguments.
They also say the prosecutors violated court rules by mischaracterizing information to jurors regarding the degree to which a former Starkey attorney was investigated by authorities and how often former Starkey officials reviewed and signed documents regarding Starkey's employee stock ownership plan.
Three assistant U.S. attorneys told Tunheim the defense chose to ignore witness statements made on the stand, plus thousands of pages of company e-mails, financial documents, altered records and evidence found by FBI agents.
The prosecutors also quoted from trial transcripts and cited case law in an attempt to show that proper procedures were followed. Defense attorneys John Conard and Casey Rundquist similarly cited case law and insisted their clients deserved another day in court.
Tunheim asked attorneys on both sides of the case what legal options might exist should the court's review of the filings and motions indicate that some procedural mistakes were made during trial. All the attorneys noted that among various options, a new trial could be granted.
The complicated case originally had six co-defendants.
Former Starkey human resources head Larry Miller and another business associate, Larry Hagen, were acquitted during the initial six-week trial. Scott Nelson, former Starkey chief financial officer, and Jeff Longtain, former head of Starkey's Northland subsidiary pleaded guilty to charges in connection with the case and testified at the trial.