Indicted, ousted Starkey executive fires back in new filings

The ousted and indicted former president of Starkey Hearing Technologies is firing back at owner Bill Austin with allegations that Austin committed sophisticated tax fraud and told employees of interactions with angels and a dead deer.

The allegations come in the latest round of filings in the federal criminal case against Jerry Ruzicka, who is charged in connection with a $20 million embezzlement scheme.

Starkey issued a statement calling the latest allegations "scurrilous, unfounded or false."

The filings also ask for disclosure of all audio and video recordings of certain employee meetings where Austin's behavior could be in question.

At one meeting, Austin allegedly told workers that after he shot a deer dead, the animal asked him, "Why did you shoot me?" and asked him not to do it again.

The filings also said Austin told employees that he was visited by angels who "told him what to do with his business dealings." Those angels, the filing said, told Austin he would die on Nov. 11, 2011, but later "reappeared in the nick of time and gave him a reprieve."

The filings also repeated allegations that Ruzicka provoked Austin's ire because he refused to promote Austin's stepson, Brandon Sawalich. The filings say Ruzicka refused to promote Sawalich because he was incompetent and because of allegations of sexual harassment against Sawalich.

The company, however, has repeatedly said that Austin started investigating Ruzicka's conduct and that of other employees after he was told Ruzicka was forming a new company that would compete with Starkey.

The filings are the latest chapter in the drama surrounding the once quiet and still well-respected Eden Prairie hearing aid maker. In September 2015, Austin abruptly fired Starkey's top four executives, two executive secretaries and about 15 managers. Intense finger-pointing followed, with wrongdoing alleged on both ends and wrongful firing and whistle blower lawsuits filed.

A year later, federal authorities charged Ruzicka, two other fired executives and two suppliers with embezzling more than $20 million from Starkey via the use of dummy companies, fraudulently transferred restricted stock plus secret bonuses and insurance policies — all allegedly issued without the knowledge of Austin.

All five defendants have pleaded not guilty.

The latest claims come in filings asking the court to force Starkey to turn over certain documents that the defense believes would be favorable to Ruzicka, who led the company for 17 years.

"The defendants in this case are alleged to have engaged in a long running, widespread conspiracy to defraud the company," the statement said. "That's not our conclusion, it's what a grand jury has charged after a yearlong investigation. We are confident that justice will be served."

Ruzicka's lawyers allege in the court filings that Austin launched false allegations against Ruzicka to hide his own bad or illegal behavior.

The filings allege that Austin executed a "sophisticated tax fraud" that allowed Austin to have a luxury mansion at his disposal at no personal cost and to receive rent from Starkey on that home. Ruzicka's defense team is asking that the company be made to release all related tax records.

Dee DePass • 612-673-7725