Former state Rep. Stephen LaRoque told jurors that he made mistakes running two economic-development non-profits, but did not intentionally steal from the federally-funded charities.
“I made a lot of mistakes,” LaRoque told jurors. “I admit that.”
LaRoque, a Kinston Republican who served as a member of N.C. House Speaker Thom Tillis’ leadership team until his 2012 indictment, is facing 12 criminal counts in a federal trial being held at the federal courthouse in Greenville. The federal probe stemmed from an August 2011 N.C. Policy Watch investigation that found LaRoque received generous salaries from the non-profit’s board of directors consisting of his immediate relatives.
Jurors have listened to more than two weeks of evidence about complex and complicated financial transactions and will begin deliberations on LaRoque’s guilt or innocence tomorrow.
He’s accused of using the bank accounts of the Kinston-based non-profits, East Carolina Development Company and Piedmont Development Company, to fund a lavish lifestyle including new cars, a Greenville ice-skating rink, a house, jewelry and replica Faberge eggs. LaRoque says he is innocent of any wrongdoing and any money in question was owed to him through contracts approved by his board of directors (who consisted for many years of himself, his wife and brother).
He faces more than 90 years in prison, if the jury were to convict him on all 12 charges.
On the stand Tuesday, LaRoque said he didn’t report all of his generous terms of his salary to auditors, accountants and the IRS but instead kept that money in East Carolina Development Company’s accounts with the assumption that he could withdraw it whenever he wanted.
LaRoque said that $300,000 worth of checks he received in 2009 and 2010 were part of this previously unreported compensation and not a result of the former lawmaker dipping into the bank accounts of the USDA-funded public charities for his own benefit.
“It was my money,” LaRoque said. “I don’t know how you can steal your own money.”
LaRoque was questioned by both his own defense attorney Joe Cheshire and federal prosecutors Dennis Duffy.
Under questioning from Cheshire, LaRoque said he bought his wife expensive jewelry and replica Faberge eggs because, “I love spoiling my wife.” Prosecutors contend he wrote himself large checks from the non-profit in order to pay for that jewelry.
But Duffy questioned why LaRoque, who repeatedly said on the stand that he was meticulous about keeping track of business documents, didn’t keep signed copies of his alleged contracts or records of his total compensation.
LaRoque said, in retrospect, he should have been more careful about his financial records.
Here are some other tidbits from LaRoque’s testimony:
- On the July day he was indicted, LaRoque called up the former head of the USDA rural lending program he participated in and said that he (LaRoque) could become the North Carolina head of the USDA office if Mitt Romney won the 2012 election. “My dream job was to be state director of the USDA,” LaRoque said, contending that he was not trying to intimidate the USDA employee from cooperating with federal prosecutors by implying that he could be the man’s boss.
- LaRoque, in explaining to jurors the House Rules Committee that he co-chaired, said he was Tillis’ “right-hand man” in the state legislature and the Rules Committee made sure rules were followed, but also manipulated legislative rules. “Were you good at manipulating rules, sir?,” Duffy asked. “I wasn’t, but I saw that other people did,” LaRoque said. He added, “It’s politics.” (A bit of clarification to this testimony: LaRoque didn’t name Tillis by name, but did tell jurors that the House rules chair is the “right-hand man” of the N.C. House Speaker, which was and is Tillis.)
- In a lawsuit he filed against two of his brothers over his mother’s estate, LaRoque accused one brother of “self-dealing” by paying the brother’s son $20 to wash the deceased woman’s car, instead of taking it to a cheaper carwash.
- LaRoque said the N.C. Policy Watch investigation came from records leaked by his Democratic opponent’s lawyers. That isn’t the case – the initial investigation relied on publicly-available records, as explained here and here.
Attorneys in the case will present their closing arguments at 9 a.m. today, and then jurors will begin their deliberations. As of mid-day Thursday, jurors were still deliberating their verdicts.
Follow Sarah Ovaska on Twitter (@SarahOvaska) for updates.
(Note: this post has changed from the original to include clarification on LaRoque’s testimony about the role of the House Rules Chair in the hierarchy of the state legislature.)