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Who’s the victim in the LaRoque case? Taxpayer or former Rep? Jury to decide

A jury could decide this afternoon if former state Rep. Stephen LaRoque stole $300,000 from federally-funded non-profits he ran or if the money was his to begin with.

Convictions on the more than dozen charges LaRoque faces could mean a maximum 90-year prison sentence.

“This case is about a simple money grap,” said Dennis Duffy, the federal prosecutor in the case, to jurors.

LaRoque

LaRoque

LaRoque’s attorney, Joe Cheshire, disagreed, saying, “”If he did, then all the money he took was his own money.”

LaRoque, 49, a Kinston Republican who stepped down from the House of Representatives following his July 2012 indictment, is accused of dipping into the bank accounts of two U.S. Department of Agriculture economic development groups to fund extravagant purchases like expensive jewelry and a Greenville ice skating rink business.

LaRoque founded both of the economic development groups, East Carolina Development Company and Piedmont Development Company, and took in nearly $2 million in compensation since 1997. The groups had taken in received $8 million in USDA loans as part of an anti-poverty program that loaned out money to small businesses in struggling rural areas.

Prosecutors contend that LaRoque saw the non-profits as his own companies, stacked the boards with his immediate family members and illegally used the federally-sourced funds to buy two cars, a house, a Greenville ice skating rink, expensive jewelry and replica Faberge eggs.

LaRoque said he had a contract that entitled him to all the money, and that he left unreported compensation in the non-profit’s coffers so that he could pull it out when he needed, despite not having documents of the arrangement or having paid taxes on the alleged earnings.

The jury began their deliberations Wednesday afternoon, after hearing closing arguments from Duffy and Cheshire. The jurors have sat through three weeks of testimony about complicated financial transactions and confusing regulations governing the USDA program.

Duffy told jurors during his closing arguments that evidence in the nearly three-week trial pointed to LaRoque’s guilt, and that the former lawmaker had started sometime around 2005 treating funds in the non-profit East Carolina Development Company as his “private piggy bank.”

“Mr. LaRoque lost his way,” Duffy said. He added, “He went from being the protector of those (non-profit) assets to preying on them.”

Cheshire countered, and said LaRoque was unfairly targeted by an overzealous prosecution.

“This man is innocent,” Cheshire said. “And I will show you he is a victim.”

But, Duffy said, the real victims were taxpayers whose money went to fund LaRoque’s lifestyle instead of helping spur economic growth in Eastern North Carolina.

“The taxpayers of this country are victims,” Duffy said. “If he’s a victim, he’s a victim of one thing. He’s a victim of his own greed.”

The federal case stemmed from an August 2011 N.C. Policy Watch investigation (click here to read) that found LaRoque, then a prominent state lawmaker, was critical of those benefitting from government funds while receiving generous salaries, as high as $195,000 a year, for a small non-profit that monitored a handful of loans, many to close associates or political allies to LaRoque. A federal grand jury began their own investigation a month after the Policy Watch piece was published.

For updates on the jury’s deliberations, you can check back at N.C. Policy Watch or follow reporter Sarah Ovaska on Twitter, @SarahOvaska.

2 Comments


  1. david esmay

    June 5, 2013 at 2:14 pm

    The taxpayer. Laroque is just another bloviating Teapublican on the grift.

  2. Doug

    June 5, 2013 at 4:43 pm

    We need to extend this reporting to other areas of corruption in the government. Sarah, when are you going to get on the law breaking and corruption in the SB of Elections? Are you not curious about them letting lobbyists have free reign over there? Or are you only a “journalist” when it is some low level Republican….but not a “journalist” when you look the other way for your favored cause?

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