United States District Court, D. Minnesota
Gregory G. Brooker, Interim United States Attorney, and
Benjamin F. Langner, Lola Velazquez-Aguilu, and Surya Saxena,
Assistant United States Attorneys, UNITED STATES
ATTORNEY'S OFFICE, for plaintiff.
C. Conard, JOHN C. CONARD PLLC, for defendant Jerome C.
T. Rundquist and William J. Mauzy, MAUZY LAW PA, for
defendant W. Jeffrey Taylor.
C. Engh, for defendant Lawrence W. Miller.
J. Short, for defendant Lawrence T. Hagen.
MEMORANDUM OPINION AND ORDER
R. TUNHEIM, United States District Court Chief Judge
Jerome Ruzicka, W. Jeffrey Taylor, Lawrence Miller, and
Lawrence Hagen have been charged in connection with the
alleged embezzlement of funds from Starkey Laboratories.
Defendants have moved to exclude testimony from Scott A.
Nelson on the grounds that the Government failed to timely
disclose exculpatory statements made by Nelson during his
interview on January 10-11, 2018. Because the Court concludes
that the Government's week-long delay does not violate
the rule of Brady v. Maryland, 373 U.S. 83, 87
(1962), the Court will deny Defendants' motion.
Indictment alleges that, in 2006, Ruzicka, Nelson, and
Jeffrey Longtain created Northland Hearing Centers, Inc.,
(“Northland Hearing”) and caused the company to
issue 100, 000 shares of restricted stock - including 51, 000
shares to themselves. (3d Superseding Indictment ¶¶
36-37, Jan. 8, 2018, Docket No. 298.) They allegedly did so
without the knowledge of William Austin, Starkey's
majority shareholder. (Id. ¶ 37.) In 2013,
Ruzicka, Nelson, and Longtain allegedly caused Northland
Hearing to pay $15, 000, 000 in exchange for the termination
of their unvested restricted stock - again without
Austin's knowledge. (Id. ¶¶ 38-43.)
December 19, 2017, Nelson reached a plea agreement with the
Government and changed his plea to guilty. (Plea Agreement,
Dec. 19, 2017, Docket No. 266; Minute Entry, Dec. 19, 2017,
Docket No. 264). As part of the agreement, Nelson agreed to
cooperate with law enforcement in the investigation and
prosecution of the other Defendants. (Plea Agreement at
11-12; Hr'g Tr. at 25:16-20, Jan. 3, 2018, Docket No.
287.) On January 10-11, 2018, Nelson was interviewed by a
postal inspector, FBI special agent, and two Assistant U.S.
Attorneys. After that interview, the postal inspector
prepared a Memorandum of Interview summarizing in detail new
information provided by Nelson. In it, she wrote that:
Nelson stated that after the newspaper published an article
referencing the Northland transaction, he spoke to either
Phil Ahern or Damon Anderson of Ernst and Young. That person
advised Nelson that they recalled that Ahern and/or Anderson[
]discussed the creation of Northland Hearing Centers, Inc.
and the restricted stock arrangement with Austin followed
(Court Ex. 1 at 1, Jan. 19, 2018.) Nelson had not previously
disclosed this information.
of the Defendants began with jury selection on January 16,
and the parties gave opening statements the next day. Counsel
for the Government argued that the restricted stock grant was
done “without Bill Austin's knowledge, ”
while Ruzicka's counsel argued that Austin
“absolutely knew” that Ruzicka had received 51,
000 shares of restricted stock in Northland Hearing. The
Government finally disclosed Nelson's exculpatory
statements on the evening of January 18, a week after his
interview concluded and three days into trial. ...