Watch CBS News

2 Starkey Executives Face New Charges In Fraud Scheme

MINNEAPOLIS (WCCO) – Two former Starkey Laboratories executives, previously indicted on fraud and embezzlement charges for a plot that took more than $20 million from the company, now face additional charges for underreporting income on tax returns.

In September, Starkey executives Jerry Ruzicka, Scott Nelson and Larry Miller and business associates Jeff Taylor and Lawrence Hagen were indicted in a fraud scheme dating back 10 years.

A superseding indictment filed Wednesday adds fraudulent tax return charges to Ruzicka and Nelson.

According to the filing, Ruzicka reported his adjusted gross income in 2010 as $782,693. The filing alleges Ruzicka knew his income was "substantially in excess" of that figure. Ruzicka faces another charge for underreporting his income in 2014 as well.

Nelson, according to the filing, underreported his income in 2014 and also aided in falsifying a corporate tax return for Starkey in 2013.

Ruzicka and Nelson were fired suddenly from Starkey in September 2015, with the company citing an ongoing investigation. Early last year, Ruzicka filed a wrongful termination lawsuit.

The original charges allege Ruzicka and Taylor – a former executive at Sonion, a major supplier of hearing aid components to Starkey – created a fake company called Archer Consulting in 2006 and funneled money to themselves for purported sales to Sonion. The fees totaled $7.65 million over the next nine years, authorities said.

Authorities also alleged Ruzicka, Nelson and Miller abused their positions at Starkey to obtain benefits and embezzle money from the company.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.