Fired Starkey President Says Company Owners Embezzled Millions

Qmed Staff

January 20, 2016

3 Min Read
Fired Starkey President Says Company Owners Embezzled Millions

The former president of Starkey Hearing Technologies is suing his former employer for wrongful termination and defamation.

Nancy Crotti

Privately held Starkey (Eden Prairie, MN) fired Jerry Ruzicka and seven other top employees last fall after Ruzicka refused to promote company CEO Bill Austin's stepson, according to a previously filed lawsuit.

In the latest legal challenge, Ruzicka alleges that Austin or his members of his family diverted millions of dollars in company funds for personal use, violated U.S. tax and customs laws, falsified records, and sold hearing aids that were made from salvaged components as "new," according to a report in the Minneapolis StarTribune.

Starkey's attorney retorted that Ruzicka himself had stolen millions from the company over the course of several years.

Ruzicka's complaint also alleges that the company owes him back wages and is retaliating against him in violation of Minnesota's whistleblower law.

Ruzicka's suit follows a wrongful termination suit filed last fall by former Starkey operations vice president Keith Guggenberger. Guggenberger is demanding more than $11 million for alleged breach of contract, defamation, and unpaid wages.

Separately, Ruzicka is seeking arbitration to obtain 10 years of deferred compensation that his contract with Starkey would have provided, plus 10% of the market value of the business should Starkey be sold or Austin no longer run the business, according to Minneapolis attorney Marshall Tanick.

Federal agents and local police executed multiple, sealed warrants to search the home of Ruzicka and former Starkey chief financial officer Scott Nelson, according to the agencies.

"We are confident that the investigation will show that Ruzicka abused the trust that was placed in him, by among other things, stealing millions of dollars from the company and its employees over a period of several years," Starkey attorney David B. Olson said in a statement released by the company. "Ruzicka's civil lawsuit will succeed neither in diverting attention from his own conduct or delaying the inevitable. Nor will he succeed in again harming the company and the people he has already victimized through claims made in his civil suit."

Former Starkey Hearing Foundation executive Maria Vanessa Boys Smith filed a whistleblower lawsuit in California against the company in December, alleging that that the company mishandled money and charged more for hearing aids than they were worth, the newspaper said. The company has denied the allegations.

Starkey operates 21 facilities and conducts business in more than 100 markets worldwide. It lists its employee numbers in the 1001 to 5000 range on LinkedIn. The 52-year-old company develops, manufactures, and distributes hearing aids through the Audibel, NuEar, MicroTech, AudioSync, and original Starkey brands.

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