Second Starkey fraud defendant sentenced to 18 months in prison – StarTribune.com

Sentencing hearings continued Thursday in the Starkey Laboratories fraud and embezzlement case, with the former president of one of the Eden Prairie-based hearing aid makers’ suppliers received an 18-month prison sentence in federal court in Minneapolis.

W. Jeff Taylor, former president of Sonion, was convicted in March of one count of mail fraud and two counts of wire fraud for hiding his ownership position in sham companies that wrongly received commissions, fees and discounts at the cost of Starkey and Sonion.

Jerry Ruzicka, fired president of Starkey, received a seven-year sentence on Wednesday for his part in the sham companies as well as stealing $15.5 million of restricted stock from Starkey subsidiary Northland Hearing and $1.9 million in fraudulent bonuses for himself and others.

U.S. District Court Judge John Tunheim reduced the amount of money connected to the three charges to more than $338,000 and also ordered two years of probation for Taylor.

The U.S. attorney’s office had asked for a sentence of seven to nine years for Taylor, and prosecutors told the court Thursday he showed no remorse and has not apologized to Sonion or its employees.

Taylor’s attorney, Bill Mauzy, asked for extreme leniency and said his client had accepted responsibility for his actions.

Taylor, at times teary-eyed, told the court he “sincerely regrets” his behavior.

“I’ve lost nearly everything, and I will pay for that for the rest of my life,” said Taylor, who had no family at the sentencing hearing.

He told the judge he went through a divorce while the case was winding through the courts and was concerned about his three daughters and elderly parents.

He asked to be imprisoned at the Duluth Prison Camp so he could be near his family. Tunheim said while the Bureau of Prisons will make the assignments he will not contest that preference, which was the same as Ruzicka’s. Both men are to report to prison on March 11.

Ruzicka, as well as former business associate Larry Hagen, who was acquitted in March of charges related to the sham companies, were at the sentencing hearing to support Taylor.

Two other sentencing hearings are set for Thursday. Scott A. Nelson, fired chief financial officer of Starkey, and Jeff Longtain, former president of Starkey subsidiary Northland Hearing, pleaded guilty to counts earlier this year.

Taylor was originally charged with 16 counts of fraud, but the jury only convicted him of three.

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