Feds Raid Fired Starkey Execs' Homes

The FBI and IRS raided the homes of two former Starkey Laboratories Inc. executives yesterday.

Nancy Crotti

Federal agents and local police executed multiple, sealed warrants to search the home of former Starkey president Jerry Ruzicka and former chief financial officer Scott Nelson, according to the agencies. The Eden Prairie, MN-company fired Ruzicka in September after Ruzicka refused to promote company CEO Bill Austin's stepson, according to a lawsuit filed by another former employee in October.

Neither the FBI nor the IRS would comment further, but Starkey issued a statement through its attorney, Scott Neilson of Henson & Efron P.A. in Minneapolis. "Federal law enforcement authorities are currently conducting an investigation to determine whether Starkey Hearing Technologies has been the victim of criminal activity. As the alleged victim, Starkey recognizes and will do whatever it takes to fulfill its civic and moral duty to cooperate with law enforcement," the statement says. "The government's investigation has no impact on the company's ongoing business" nor on the Starkey Hearing Foundation, which "is not alleged to have been victimized, has not been asked to assist with any investigation and its mission has not in any way been compromised."

Ruzicka's attorney, Marshall Tanick, said he and his client have no idea why the FBI and IRS searched Ruzicka's home Wednesday, according to MPR News.

The foundation is known for its star-studded galas that raise money to donate hearing aids to people around the world.

The news surrounding the company lately has been less than stellar. The lawsuit by fired vice president of operations Keith Guggenberger claims that Starkey fired him for planning to leave for a competitor started by Ruzicka. Guggenberger acknowledges an email exchange with Ruzicka about a startup, but maintains in the suit that he made no formal plans to leave.

The suit describes a hostile working environment at Starkey, maintaining that Austin routinely lashes out and yells at employees. The company dismissed six executives and two executive assistants, according to a report in the Star Tribune of Minneapolis.

Starkey officials asked the court to dismiss Guggenberger's $11 million lawsuit on October 19, claiming it contained insufficient information to merit the claims, the Star Tribune story said.

Ruzicka "has significant claims for wrongful termination, breach of contract and other matters and he anticipates proceeding with those soon," said his attorney, Marshall Tanick of Minneapolis. "There are different places where legal action may be taken."

Ruzicka, Guggenberger, and Nelson were largely credited with driving growth at the $800 million, privately held company, which Austin founded in 1967, the Star Tribune story said.