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.
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.