Under the Dome

Dome: LaRoque theft, money-laundering trial begins Monday

From Staff ReportsMay 18, 2013 

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Former State Representative Stephen LaRoque leaves the Terry Sanford Federal Building in Raleigh after he made his first court appearance Monday, August 6, 2012. LaRoque has been indicted on charges that he took money loaned to his company through a federal program and spent for his family members.

TAKAAKI IWABU — tiwabu@newsobserver.com

Former state Rep. Stephen LaRoque of Kinston will go on trial in federal court Monday in Greenville on charges that he enriched himself with U.S. Department of Agriculture money that he was supposed to loan to struggling rural business owners.

The trial is expected to be protracted because it involves complex financial transactions that the government contends amounted to theft and money laundering. LaRoque, who is represented by Raleigh attorneys Joseph Cheshire V and Elliot Abrams, says prosecutors are trying to call legitimate transactions theft.

Assistant U.S. Attorney Dennis Duffy, in recent briefs he has filed, says LaRoque’s defense will be to try to portray the alleged crimes as “mere ethical lapses.” Duffy says the case comes down to theft of $300,000 in federal funds, and charges related to his alleged attempts to conceal the theft and avoid taxes through “sham loans.”

Duffy filed a notice earlier this month outlining evidence that might be introduced in the trial. That includes allegations that LaRoque:

• Tried to cover up his activities after learning he was under investigation.

• Failed to report his financial dealings on state ethics forms.

• Hid from the N.C. Board of Elections that he had diverted loan money to his campaign.

• Increased his compensation in order to pay for expensive jewelry and cars.

• Was engaged in self-dealing, used money from his nonprofit re-lending firm to replace a Zamboni ice machine at an ice rink he bought for his wife, and made loans and paid legal fees to his attorney with his nonprofit’s money.

The government might also go into the 2010 defamation lawsuit LaRoque brought against a political opponent who accused him of using federal loans to finance his businesses, the brief states. After suing, LaRoque then refused to turn over records in the lawsuit that would have shown that he had, in fact, loaned his for-profit business $300,000 from his nonprofit re-lending entity, the brief states.

LaRoque resigned from the General Assembly under pressure last year after he was indicted. He was a Republican representative in Lenoir, Greene and Wayne counties.

United front on Medicaid

The top three Republican politicians in the state have announced they are all together when it comes to Medicaid reform.

Gov. Pat McCrory, Senate Leader Phil Berger and House Speaker Thom Tillis sent out a joint news release Friday emphasizing that – despite criticism of the move toward privatization – the state is proceeding with plans to rein in costs in the $13 billion program.

Their joint announcement said the state Senate’s budget will require the state Department of Health and Human Services submit a waiver application to the federal government. The budget, which will be released Sunday evening, will have to be approved by both chambers in the General Assembly.

A federal waiver would allow the state flexibility in operating and paying for its Medicaid programs. McCrory has said he wants to privatize some of Medicaid as a way to reduce cost overruns.

Guiding principles in the state’s reform plan include focusing on behavior as a way to improve health, making it easier on providers, and developing a reliable estimate of costs.

5 bills signed into law

Gov. Pat McCrory signed five bills into law on Friday:

HB484 – Establishes a permit program to place and operate wind energy plants. DENR will both help wind developers get started and deny permits when necessary.

“We can and will protect the environment and our citizens while also creating a clear regulatory path for the development of wind energy in North Carolina,” DENR Secretary John Skvarla said in a statement the governor’s office released.

HB149 – Titled “Caylee’s Law,” the bill makes it a crime to fail to report the disappearance of a child to law enforcement. It also increases the penalty for concealing a child’s death and for making a false report to law enforcement to interfere with a missing-child investigation. The law also makes it a misdemeanor to fail to report abuse, neglect or death of a juvenile due to maltreatment. The bill was inspired by the death of Caylee Anthony in Florida.

SB91 – Protects people whose criminal records have been expunged from having to disclose that information to employers, licensing boards and educational institutions.

HB706 – Exempts from landfill permit requirements the disposal of debris from decommissioned manufacturing buildings, including electric generating stations.

HB119 – Authorizes the state Utilities Commission to set rates for natural gas local distribution companies.

Staff writer Craig Jarvis

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