Prosecutors are asking a federal judge to send former Starkey President Jerry Ruzicka to prison for 15 to 20 years for his fraud and embezzlement convictions.
Ruzicka's attorneys are asking for probation or home confinement, according to court documents.
Ruzicka was convicted March 8 of orchestrating schemes that resulted in more than $20 million in ill-gotten gains from Starkey Laboratories, the nation's largest hearing aid manufacturer, and Sonion, one of Starkey's suppliers.
W. Jeff Taylor, former president of Sonion, was convicted for his role in co-creating sham companies with Ruzicka that charged fraudulent fees and commissions. Prosecutors are recommending seven to nine years in prison for Taylor.
Ruzicka and Taylor are scheduled to be sentenced Dec. 19 by U.S. District Judge John Tunheim.
Two co-conspirators who pleaded guilty to lesser charges — Starkey's former Chief Financial Officer Scott A. Nelson and a former Starkey subsidiary president, Jeff Longtain, — are scheduled to be sentenced Dec. 20.
Federal prosecutors said in court documents that any arguments for leniency for Ruzicka should be denied. Any "sentence below the guidelines range should be disparate with other fraud defendants in the district who are sentenced within the guidelines despite having mitigating characteristics," they said in a filing.
Ruzicka's attorneys said in another filing that the court should not only downgrade the prosecutors' sentencing request but order a new trial based on what they claim is new evidence in the case. It isn't Ruzicka's first request for a new trial; the judge has denied several requests.
Prosecutors insisted Ruzicka's latest efforts also should be squelched. "The defendant has failed to satisfy any of the prerequisites for a motion for a new trial based on newly discovered evidence," they said. "The court should deny the motion without a hearing."
Undeterred, in one 76-page rebuttal, Ruzicka's attorneys continued to claim — as they did during the trial — that Ruzicka's actions were done with the knowledge of Bill Austin, owner of Eden Prairie-based Starkey. The documents also allege that Ruzicka's actions as Starkey president specifically benefited Austin by "putting $35 million to $70 million in the pocket of the aggrieved billionaire."
Austin has denied any knowledge of Ruzicka's actions and has said the trial showed he is a victim as well as his company. Starkey Hearing Technologies General Counsel Thomas Ting said in an e-mail Tuesday that Starkey "looks forward to the conclusion of this matter. The guilty will be sentenced, and the innocent victims will be free of these absurd attacks."
Ruzicka's attorneys claimed in the filings that the U.S. attorney's office mischaracterized certain trial information when presenting its arguments for a hefty prison sentence for Ruzicka and Taylor.
"This has been a unique case," Ruzicka's attorneys said in the filings. "It is hard to imagine a darker thicket around the facts by the time of a sentencing hearing. But, the court can set the record straight, so that the truth moves forward. We also pray that this court will temper the guidelines with mercy."
A spokeswoman for the U.S. attorney's office said Tuesday that the government will file further responses to Ruzicka's latest allegations and plans to address them on a point by point basis soon.
Separately, the government has begun preliminary forfeiture proceedings for millions of dollars in insurance and investment moneys tied to Ruzicka and Taylor's fraud. Prosecutors have asked the court to approve Ruzicka's forfeiture of at least $2.7 million. The money has already been seized by the government from accounts Ruzicka held with Edward Jones and Lincoln National Life Insurance Co.
Dee DePass • 612-673-7725
