Judge rules Starkey fraud convictions should stand

Two convicted defendants in the Starkey Laboratories fraud case will not receive a new trial.

U.S. District Judge John Tunheim ruled Friday that the fraud convictions of Starkey's former president Jerry Ruzicka and W. Jeff Taylor, former president of Starkey supplier Sonion, will stand.

The men were convicted by a jury in March of defrauding Eden Prairie-based Starkey, the country's largest hearing-aid maker, and Sonion out of millions of dollars via a restricted stock transfer scheme conceived by Ruzicka and unearned commissions and consulting fees through phony companies that the two men shared.

The defendants filed 10 motions arguing they should receive a new trial or have their cases dismissed for reasons ranging from prosecutorial misconduct and perjury allegations against Starkey's majority owner and CEO Bill Austin, to evidence suppression and the government's improper coupling of several defendants.

In his 64-page ruling, Tunheim went point by point through the eight motions filed by Ruzicka and two motions filed by Taylor as he ruled against them.

While other new motions could be filed, the next step likely will be scheduling sentencing hearings.

Ruzicka, who worked at Starkey for 38 years, was convicted on eight of 25 counts of mail, wire or tax fraud. Taylor was convicted on three of 16 counts of mail and wire fraud.

The criminal case originally involved six defendants. Two pleaded guilty. Two others were found not guilty. Ruzicka and Taylor were convicted after a six-week trial.

The two pleading guilty were former Starkey CFO Scott A. Nelson and Jeff Longtain, the former president of Starkey's Northland Hearing Centers subsidiary.