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LaRoque’s defense on federal charges: He was owed the money

Court documents filed this week indicate that former state Rep. Stephen LaRoque will defend himself against charges he stole from his federally-funded non-profits by saying he deserved the money.

“Mr. LaRoque was entitled to the funds he is charged with stealing, so he did not steal them,” wrote Joe Cheshire, LaRoque’s attorney, in a response filed Monday with the federal court seeking to have the prosecutor’s 70-plus “introduction” section of the indictment stricken from the record.

Attorney Joe Cheshire addresses media outside the federal courthouse last August after Stephen LaRoque’s first court appearance. Stephen LaRoque is standing on the left of Cheshire.

LaRoque, a Kinston Republican, resigned from his legislative seat last year, after a federal grand jury indicted him on charges from using the federal funds in the East Carolina Development Company and Piedmont Development Company to enrich himself. He had already been defeated in the Republican primary that spring by state Rep. John Bell.

The federal indictment accuses LaRoque of taking $300,000 in additional compensation from the non-profits, and using the money to buy jewelry for his wife, an ice-skating ring and replica Faberge eggs for his wife.

The federal probe appears to have began after the publication of a 2011 N.C. Policy Watch investigation “Public money, personal gains” that found LaRoque was paid generously while running the small non-profits, which were supposed to spur economic growth in rural areas by lending money to small businesses. LaRoque’s non-profits, which were controlled by a board made up of LaRoque’s immediate family members, also lent money to close associates of LaRoque’s, including two state lawmakers and his attorney.

The N.C. Policy Watch investigation also found the U.S. Department of Agriculture had lax oversight of the Intermediary Relending Program that LaRoque’s non-profits were funded through. USDA officials in Raleigh told N.C. Policy Watch that they were unaware of LaRoque’s high salaries.

The agency neglected to conduct required annual field visits of LaRoque’s non-profits for four years. Audits submitted to the USDA each year raised concerns about LaRoque having sole control over the organizations’ finances and records, but USDA officials never appeared to have demanded or sought changes.

In court filings this week, Cheshire asked that the charges against LaRoque be dropped because the wrongdoing alleged didn’t amount to a crime. The USDA rules were confusing, Cheshire wrote in court documents, and any money LaRoque took was money he was owed.

“[T]he rule of levity should prevent Mr. LaRoque from being criminally prosecuted for violating such grievously ambiguous and uncertain regulations,” Cheshire wrote.

Federal prosecutor Dennis Duffy, in a separate motion, indicates that he plans on arguing in court that LaRoque stole money from the non-profits on top of an already-generous salary and hatched a scheme to hide the theft by creating retroactive contracts with the non-profits.

“In January 2009, the Defendant stole $300,000 from two federally-funded non-profits for whom he served as Executive Director,” Duffy wrote in the motion. “In order to conceal his theft, the Defendant chose to extract the fruits of his crime under the guise of loans from the non-profit to his private company.”

As Craig Jarvis of the News & Observer’s “Under the Dome” blog notes here, LaRoque’s attorney mentioned N.C. Policy Watch in the court filings, referring to us as “Democratic-leaning” and suggesting the probe was politically motivated.

For readers who are interested, here’s a link back to the piece we published with the 2011 investigation detailing how the piece was reported and written.

LaRoque’s trial is slated to begin May 20 in Greenville, and N.C. Policy Watch will have coverage of the trial.

18 Comments

  1. Doug

    April 25, 2013 at 1:32 pm

    What were the excuses for:
    Jimmy Green, Richard Morgan, and Jim Black, Meg Phipps, Mike Easley, Bev Perdue

    Might want to work on getting your house in order before going into hysterics on this. Corruption is not a party, idealism thing. It is a politician/bloated government power thing. Can I then expect to see some page time when the next corrupt leftist appears? If so, start covering the Bev associate who was just in the news.

  2. Jack

    April 25, 2013 at 2:23 pm

    Lately you’ve been using the word hysterics or some form of the word. “I do not think it means what you think it means.”

  3. Gene Bridges

    April 25, 2013 at 2:23 pm

    Doug is a lazy critic. This site, has, in fact, reported on corruption in *both* parties in times past. Try to avail yourself of the archives before making such obviously refutable statements, Doug.

  4. david esmay

    April 25, 2013 at 2:24 pm

    “I stole the money because, gosh darn it, I deserved it.” Stephen Laroque
    Another “entitlement” conservative on why he feels it’s o.k. to steal from tax payers. Righties love socialism when it’s applied to them, and capitalism for the rest of us.

  5. Gene Bridges

    April 25, 2013 at 2:25 pm

    Facts don’t matter to Doug. As long as he gets to use words as direct or indirect adjectives like “hysterics,” “leftist,” and “communist,” that’s all he needs. He’s all assertion, no argument. He obviously doesn’t bother to do much fact checking either.

  6. gregflynn

    April 25, 2013 at 2:44 pm

    Poor hysterical Doug, the House, the Senate and the Governor’s mansion – each one of them is “our house” and we expect them to be in order regardless of who or which party occupies them.

    Jimmy Green died in 2000. Richard Morgan is a Republican. They and Meg Phipps pre-date this blog. Jim Black plead guilty a month after it started Jan 2007. I personally was very active in criticizing him up to that point. Both Easley and Perdue have gotten unflattering attention from this blog:
    http://pulse.ncpolicywatch.org/2011/11/28/perdues-only-hope/
    http://pulse.ncpolicywatch.org/2010/11/23/one-lesson-from-the-mike-easley-tragedy/
    http://pulse.ncpolicywatch.org/2010/11/24/democracy-nc-speaks-up-on-the-easley-mess/
    http://pulse.ncpolicywatch.org/2008/02/05/834/

    Your hysterics have no basis in fact. Might want to ask the Carolina Journal why they have apparently NOT covered this case.

  7. Doug

    April 25, 2013 at 4:09 pm

    Gene, could you link where this site has highlighted prominent democrat/leftist corruption. I would be interested.

  8. Doug

    April 25, 2013 at 4:12 pm

    Hysterics describes exactly what I mean, primarily number one when it comes to the headlines that certainly fits the bill. Although I guess #2 could apply to me as I see the reactions to the rational thoughts I provide here. We are just all one big hysterical bunch….

    hysterics plural of hys·ter·ic (Noun)
    Noun
    1.A wildly emotional and exaggerated reaction.
    2.Uncontrollable laughter.

    Synonyms
    hysteria

  9. Jack

    April 25, 2013 at 4:18 pm

    Thanks Doug, that’s exactly what I wanted.

    pre·dict·a·ble
    /pri?dikt?b?l/

    Adjective
    1. Able to be predicted.
    2.Behaving or occurring in a way that is expected.

    Synonyms
    foreseeable

  10. Doug

    April 25, 2013 at 4:21 pm

    Gene,
    Your premise on what this site covers on democrat corruption is a bit off. Quick search on John Edwards ( I left him out above since he was on the national scene not just NC) as and example had almost no coverage, with one post actually looking like a justification for what he did apologist type slant to things. Meaning oh poor Johhny is so maligned by the Conservatives type thing.

    Good try though, unless you have some links for me that show actual criticism of Easly, Perdue, et al. I am not buying in.

  11. jlp75

    April 25, 2013 at 6:38 pm

    Do your own damn search Doug. A quick google search of this site yielded articles critical of Jim Black and Mike Easley. I’m sure more could be found if I felt like wasting any more time on your lack of information. I would provide the links but I’m not doing your work for you. Furthermore you are the one that has stated that this site has not had critical pieces on Democrats so the burden of proof is on you my friend. It seems to me that this position is much like everything else you say on here, lacking any credible source other than your rear orifice.

  12. Frances Jenkins

    April 25, 2013 at 10:48 pm

    Love is what Gene needs. Gene is very mean spirited if you do not agree with his liberal positions.

  13. Doug

    April 26, 2013 at 9:15 am

    jlp,
    As I was told by Chris a few weeks ago, it is up to the poster to prove their point.

    And I did do research and found the premise Gene put out there to be false. So unless you have proof jlp, or Gene then my facts still stand that this site ignores progressive/leftist corruption and goes into hysterics on corruption by others.

    Prove me wrong

  14. jlp75

    April 26, 2013 at 9:43 am

    Doug, I can’t help that you lack the ability to properly search the web. The information is out there and if you wanted to find it you would. However, you have a vested interest in not finding the information because the truth would contradict your world view. I am not wasting my time doing your research. Perhaps if you would work a little harder on research you would not come across as so ill informed. We are all entitled to our opinions but facts are not debatable. A statement presented as fact can only be true or false. Since there are in fact articles critical of Democrats on this site this makes Gene’s position fact and yours bull squirt.

    Furthermore, if you would even bother to read this thread you would see that gregflynn, who must have more tolerance for your crap than me, has presented a list of articles that your feeble attempts at searching failed to yield. I hope in the future you spend less time spreading misinformation and more time learning to search the internet.

  15. Doug

    April 26, 2013 at 10:05 am

    Well, as Chris said. It is up to the person presenting information to make their case and the same can be said of you guys when I present information and am forced down the same rathole argument. So jlp…the same is true of the closed minded people on this blog as well.

    Plus, it would take away from trolling time :)

  16. Doug

    April 26, 2013 at 10:10 am

  17. david esmay

    April 27, 2013 at 5:43 pm

    How does failure to pay personal income tax a democratic corruption case? Epic fail Doug, how about Republican’t Fletcher Hartzell stealing millions from to elderly clients suffering from alzheimer’s? He charge the man $40,000 just to eat lunch with him, that is conservative scumbaggery at it’s finest.

  18. Doug

    April 29, 2013 at 9:43 am

    and how is this Larouqe guy a Republican corruption case? That tin foil hat you have on now is scrambling your signals dave. You need to change it every day you know.