Federal judge: Starkey Laboratories founder Bill Austin perjured himself

(KMSP) - A federal judge ruled Tuesday that Starkey Laboratories founder Bill Austin lied under oath during an ongoing $20 million fraud trial against former company executives and business associates.

The rare move is one defense attorneys say doesn't necessarily result in a mistral, but will put the jury in relatively uncharted waters.

As a result, U.S. Chief Judge John R. Tunheim is now ordering the U.S. Attorney’s Office to make a list of all the false statements it may have given--namely from Austin, a key witness for the government--before closing arguments.

The trial began after three Starkey executives, along with two business associates, were accused of taking millions from the company by setting up shell companies and paying themselves bogus consulting fees, commissions and stock options. They have all plead not guilty.

The court order came as a brow raiser to defense attorneys not connected to the case who FOX 9 reached out to for objective comment.

“You have a federal judge who’s saying in an order that Mr. Austin has provided false testimony. That’s pretty powerful stuff,” said Joe Tamburino, a Minneapolis-based defense attorney. “The judge clearly says the court finds that Austin provided false testimony. I would take that seriously."

According to the order, Austin’s testimonies contradict those of other witnesses and government agents. The defense’s motion was granted in part because the government knows of two clear instances of perjury related to Austin’s contradictions:

1. Over whether or not Austin shredded gross income reports
2. Over testimony that Starkey President Jerome Ruzicka drafted and amended Austin’s employment contract

As a result, the case is in strange territory because the court cannot convict anyone based on perjured testimony.

“I think that’s really damaging for the Government’s case because--think about it--you’re basically coming in and telling the jury, 'Look, my witness or witnesses who testified before–we have to strike their testimony," Tamburino said. This is going to be powerful stuff, especially against the Government.”

More developments are expected in the case Wednesday. For now, closing arguments are set for later this week.