Prosecutors went over a slew of documents and computer files with federal agents on Friday, showing how complicated the $20 million embezzlement case is against two former Starkey Laboratories executives and two of their business associates in U.S. District Court in Minneapolis.
The government has charged former Starkey President Jerry Ruzicka; former human resources head Larry W. Miller; and former business associates W. Jeff Taylor and Larry T. Hagen with theft and fraud charges in connection with the alleged embezzlement over a 10-year period beginning in 2006.
The defendants have denied all charges, and their attorneys have said Starkey's owner, Bill Austin, either knew and approved of their actions, or gave the executives in question the authority to do certain functions without his permission.
Allegations in the case include the creation of sham companies, fake invoices, and secret payments of commissions, rebates and bonuses. The majority of the theft allegations, however, center on the transfer and sale of restricted stock in a Starkey subsidiary called Northland Hearing Centers.
Two other fired executives — former Chief Financial Officer Scott Nelson and former Northland President Jeff Longtain — have pleaded guilty in connection with the stock transfers and are both expected to testify in the trial.
On Friday, the third day of the trial, Federal Bureau of Investigation and Internal Revenue Service agents went over some of the evidence collected in the case, including an allegedly forged signature.
Assistant U.S. Attorney Surya Saxena and FBI special agent Brian Kinney showed jurors signatures on documents for Northland that were supposed to be Austin's. While both signatures were his name, they were markedly different. Kinney surmised the later signature was forged, allowing the defendants to later steal $15 million in restricted stock from Austin.
The first document Kinney showed jurors was an Austin signature from 2002, when Austin first set up a subsidiary called Northland U.S.