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Stephen LaRoque’s personal attorney testified in federal court this morning, telling jurors he warned LaRoque against filing a defamation lawsuit unless LaRoque was sure there was no truth to the allegations of self-dealing.

“He said he had nothing to hide,” Bert Diener said about LaRoque.

On the stand Thursday, Diener said he was unaware at that time of $300,000 worth of checks that LaRoque had written from his federally-funded non-profit to his own business in the months before filing the defamation lawsuit.

Copies of the checks were shown to jurors, during federal prosecutor Dennis Duffy’s questioning of Diener.LaRoque-PC

Those checks are at the heart of the criminal charges facing LaRoque, 49, a Kinston Republican that stepped down from the N.C. House of Representatives following his indictment last July. Federal prosecutors believe LaRoque, in addition to generous annual salaries of up to $195,000 from the small non-profit, stole $300,000 from federally-funded economic development non-profits, East Carolina Development Company and Piedmont Development Company. He’s accused of using the bank accounts of the non-profits to support a lavish lifestyle, including buying cars, expensive jewelry and replica jewel-encrusted Faberge eggs for his wife and a Greenville ice-skating rink.

LaRoque, who has pleaded not guilty, faces more than 90 years in prison if convicted of all 12 charges he faces.

The non-profits had received more than the U.S. Department of Agriculture as part of a rural lending program that was supposed to combat poverty by offering loans to small businesses that traditional banks had shunned.

LaRoque’s indictment followed an August 2011 N.C. Policy Watch investigation (click here to read) that questioned LaRoque’s high salaries, as well as the non-profit’s board consisting of LaRoque’s immediate family members. The investigation also found that USDA had fallen down in its own lax requirements of supervising the non-profit, skipping several years of site visits to the non-profits.

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Stephen LaRoque’s brother took the stand Tuesday in a federal criminal trial in Greenville, where the former lawmaker is facing a dozen charges accusing him of stealing $300,000 from his federally-funded non-profits.

LaRoque’s brother Walter LaRoque, a real estate agent, served on the board of directors for the two economic development groups founded by Stephen LaRoque, a Kinston Republican who stepped down from his seat at the state legislature after his July indictment.

East Carolina Development Company and Piedmont Development Company received $8 million from the U.S. Department of Agriculture for a rural lending program that was supposed to offer loans to small businesses in struggling areas. But federal prosecutors believe LaRoque, over the years, used the non-profits bank accounts to buy lavish jewelry presents for his wife and other luxuries by taking 3 percent of the groups’ entire assets, including large stockpiles of cash.

The trial is being held in Greenville, and is expected to last through the week, and possibly into next week. Read More

The criminal trial against former state Rep. Stephen LaRoque began in earnest Tuesday, with testimony from former board members of his non-profit and federal agriculture officials who oversaw the rural lending program he ran.

Yet to be mentioned are a dozen replica Faberge eggs and jewelry the Kinston Republican is accused of buying with money he stole from his economic development non-profit, East Carolina Development Company. (Click here to read a past blog post about the eggs LaRoque bought, and a brief history of the eggs themselves.)

The trial is being held at the federal courthouse in Greenville in front of Senior U.S. District Court Judge Malcolm Howard.

Former ECDC board member John Melling, a New Bern insurance agent, said he served on the board of East Carolina Development Company for eight years and left in 2006 because he didn’t feel at ease serving a board consisting largely of LaRoques—Stephen, his brother Walter and wife Susan.

“I just felt uncomfortable,” Melling said. “You had three directors, they were all related. Stephen, his brother and his wife.”

Melling had also said he was pleased with the non-profit’s earlier work. Read More

Former N.C. state Rep. Stephen LaRoque will go to trial in May at the federal courthouse in Greenville on charges of stealing from two federally-funded economic development charities.

In a court order filed last week, U.S. Senior District Judge Malcolm J. Howard set a May 20 trial date for LaRoque, a former member of House leadership who resigned after his indictment last July on federal charges. Howard will preside over LaRoque’s jury trial.

Federal prosecutors believe LaRoque used public money from two economic development non-profits he ran for his own purposes, including buying replica Faberge eggs and diamond jewelry for his wife and a Greenville ice-skating rink run by family members. Read More

The federal trial of former state Rep. Stephen LaRoque on charges of money laundering and stealing federal funds has been pushed back to later this spring.

His trial is now scheduled for the week of May 14  in front of U.S. Senior District Judge Malcolm Howard, according to an order signed Friday by Malcolm. The previous trial date had been in February.

LaRoque

LaRoque

LaRoque, a Kinston Republican, was a state legislator in a prominent leadership role when he was indicted last July on eight counts of theft of government funds and money laundering. He resigned soon after the indictment was handed down by a Raleigh-based federal grand jury.

The federal investigation followed the publication in August 2011 of an N.C. Policy Watch investigation that found he received plush salaries, stacked the board of directors of the East Carolina Development Company and Piedmont Development Company with immediate family members and arranged loans of U.S Department of Agriculture money from his two non-profits to two other state lawmakers and other close associates.

The July indictment accuses LaRoque of using the non-profits to help fund a lavish lifestyle that included buying replica Faberge eggs for his wife, cars, a house for a step-daughters and a roller-skating rink for his family members.

A federal grand jury handed down four additional charges of fraud and tax evasion in December, and LaRoque’s defense attorney Joe Cheshire will need more time to go over new evidence, wrote Dennis Duffy, the assistant U.S. Attorney handling the case.

 

 

Continuance motion for Stephen LaRoque trial by ncpolicywatch