Starkey’s Bill Austin questioned about key company documents: Austin claims defendants hid papers from him.
From the Minneapolis Star-Tribune:
Starkey Laboratories owner Bill Austin — on the stand for a second day in a fraud trial against the company’s former president and three others — said he had never seen nor read key documents outlining how a subsidiary was set up and structured.
Jerry Ruzicka, the former president, is on trial along with former human resources chief Larry Miller and business associates W Jeffrey Taylor and Larry T Hagen on charges they embezzled $20 million from Eden Prairie-based Starkey.
The men have pleaded not guilty, and their attorneys have said Austin either knew or should have known about the transactions under dispute in the trial.
Austin testified he had never seen critical consolidated financial statements addressed to Starkey’s board of directors of which he is the sole member. Several of those auditor documents outlined how assets were transferred from the company’s Northland US LLC subsidiary to a new entity called Northland Hearing Centers Inc.
Starkey paid $5.3 million for 49 percent ownership of Northland Hearing Centers with Ruzicka, former Chief Financial Officer Scott Nelson and former subsidiary President Jeffrey Longtain obtaining the other 51 percent of the shares.
Under cross-examination, Ruzicka’s defense attorney, John Conard, asked Austin about a document showing that the Northland Hearing Centers entity was used by Starkey to buy the hearing aid retail business that belonged to Austin’s in-laws, Joe and Pat Manhart. This document and others, he said, show Austin should have known about the business dealings, especially since the papers had his name on them.
But Austin said he did not write the agreement with his in-laws. He would have orchestrated the deal and left its execution to Ruzicka or Nelson. “How the contract was executed, I have no idea.”
Austin said he trusted his attorneys, accountants and executives to inform him of the contents of business documents, and he would sign them without necessarily reading them.
Balance in the Star-Tribune