Former state Rep. Stephen LaRoque was convicted today on a dozen charges related to the theft of funds from a federally-funded rural business lending program he ran for more than a decade in the eastern part of the state.
LaRoque, 49, a Kinston Republican, was convicted by a federal jury of
four counts of stealing from the federal program four counts of laundering the theft through financial transaction, two counts of concealing the theft and two counts of filing false statement on tax forms.
LaRoque showed little emotion upon hearing the guilty verdicts, according to WNCT reporter Katie Banks, who was in the courtroom.
His sentencing will be in September, and he was released on bond until then. He faces a maximum punishment of more than 90 years in prison, along with significant fines.
LaRoque, a co-chair of the powerful House Rules Committee, had been in the N.C. House of Representatives until his July 2012 indictment, when he resigned.
The crimes were related to LaRoque’s management of East Carolina Development Company and Piedmont Development Company, two non-profits founded by LaRoque that receive $8 million in U.S Department of Agriculture funding to lend money to small businesses struggling in the state’s rural areas. But LaRoque profited significantly from running
the charities, taking in an estimated $2 million in compensation over the years.
Evidence in the trial showed that LaRoque took $300,000 from the non-profit to buy a house for his stepdaughter, a portion of a Greenville ice-skating rink, expensive jewelry, replica Faberge eggs and two cars.
LaRoque had testified to jurors and insisted the money was his, from contracts he had with the non-profits.
A federal grand jury began its probe of LaRoque after the August 2011 publication of “Public money, personal gains,” an N.C. Policy Watch investigation. The Policy Watch piece, using public records as its basis, found that LaRoque had received salaries much higher than his counterparts while running a lending organization that arranged loans to close associates, including then-state Sen. Debbie Clary and state Rep. Mark Hilton. Clary used the money to buy a Shelby building for her marketing firm while Hilton bought a number of mobile homes for a mobile home park. Neither sought reelection in 2012.
LaRoque’s board of directors consisted of himself, his wife and brother, despite IRS and USDA rules that frown upon such conflicts of interest.
The Policy Watch investigation also found that USDA’s oversight was lacking, and that USDA officials failed to properly monitor how LaRoque was benefiting from the non-profit.