GREENVILLE — Terms and definitions, facts and figures and a slew of acronyms became the topics du jour in day two of the fraud trial of former state Rep. Stephen LaRoque.
Prosecutors delved deep Tuesday into what they consider to be the beginning of laying a factual and documented case against LaRoque. Bound documents covered the prosecutors’ desk while the defense made do with 6-inch thick D-ring binders.
All of that, and one document couldn’t be confirmed.
Part of the U.S. Department of Justice’s case against the former lawmaker relates to a 2009 contract outlining the nature of his compensation as executive director at East Carolina Development Company. The defense maintains there was a contractual relationship between LaRoque and ECDC from the start, based on 3 percent of the total dollar amount of loans he managed. As ECDC serviced more loans, LaRoque’s pay more than doubled.
In the minutes of the ECDC Board of Directors, statements on the annual budget state LaRoque was paid for “contracted services.”
John Melling, former president of ECDC and a member of the board from 1997 until 2006, told the court he had no knowledge of a written contract, but believed there was an agreement to pay LaRoque, “2 to 3 or 4 percent” of what was called, “assets under management.”
Repeatedly questioned by LaRoque attorney Joe Cheshire, Melling repeated he had no knowledge of a written agreement, but to the best of his memory, there was a verbal one.
“I think it’s crystal clear,” Cheshire exclaimed.
The defense considers money LaRoque received from ECDC in 2010 — what the prosecution considers theft — was actually money LaRoque was owed by the company all along under the agreement.
Asked by assistant U.S. Attorney Dennis Duffy why he left the ECDC board in May 2006, Melling put it into one word.
“Uncomfortable, probably the best word,” Melling said.
Melling elaborated by saying board meetings became infrequent, and with LaRoque, his wife Susan and his brother Walter as the only other board members usually attending, he didn’t like how that could stifle discussion.
LaRoque’s wife was appointed before they were married, and at the time Melling said he believed her business experience would be good for the board, same as when LaRoque’s brother was appointed.
Indeed, Melling said he never questioned LaRoque’s motives in running the company.
Wes Wolfe can be reached at 252-559-1075 or wes.wolfe@kinston.com. Follow him on Twitter @WolfeReports.