The 10 standing convictions from former state Rep. Stephen LaRoque’s federal fraud trial could be in danger of being vacated ahead of a new trial.
On Aug. 1, U.S. District Court Judge Malcolm Howard set aside the guilty verdicts on the tax fraud charges, which were Counts 11 and 12 in the second superseding indictment.
After the jury gave its decision on June 6, two jurors discussed the case with Assistant U.S. Attorney Dennis Duffy. They revealed one of the jurors — Juror No. 3 — conducted research on the IRS website to better inform himself as to the laws governing “S” corporations, one of the key parts of the case.
In his Aug. 1 decision, Howard ruled the research was outside his instructions to the jury and infringed on LaRoque’s Sixth Amendment right to an impartial jury.
Howard wrote the research didn’t pertain to the other 10 convictions.
“However, Counts Eleven and Twelve are distinguishable from the other counts,” Howard wrote. “The viewing of information on the IRS website on how to file taxes is irrelevant to Counts One through Ten of the Second Superseding Indictment.”
A source close to the case told The Free Press that Juror No. 3, Jerry Miller, explained to his fellow jurors the research changed his opinion from an acquittal on all counts to guilty on all counts. Consequently, there exists a path to tie the research to the standing convictions and the beginnings of an effort by the defense to bring the matter before Howard are underway.
Michael J. Gerhardt, director of the UNC Center for Law and Government, said there’s a decent possibility Howard takes another look at whether Miller’s actions prejudiced the jury on the 10 counts.
“If he’s already thrown out two because of one juror, he’s probably going to be concerned about the extent to which other jurors were tainted by something similar,” Gerhardt said.
Reached at his Jones County home by The Free Press, Miller acknowledged the research played a large role in his decision on LaRoque’s guilt. He said LaRoque had to have read the same instructions on the tax laws regarding S corporations.
“They were pretty clear — what you’re allowed to do, what you’re not allowed to do,” Miller said. “It blew a hole in (LaRoque’s) case basically, as far as I was concerned.”
He later said the U.S. Department of Agriculture regulations regarding loans LaRoque’s East Carolina Development Company and Piedmont Development Company lent to rural businesses conflicted and their enforcement should have been rendered invalid.
“The other counts need to be brought back up, because of the simple fact of jury nullification,” Miller said. “As a jury, we have a right to nullify anything that we see is unjust. The way the USDA rules are written up for the way he was to conduct his business, they contradicted themselves.
“Even according to their own people, their own auditors, there was a contradiction there. When you have contradictions like that, you have cases like this.”
However, Miller reiterated what he said in a June 19 hearing that he didn’t feel what he did violated the judge’s instructions.
“Research, yes, but could it be attached to that,” Miller asked. “Hell, I could have been looking up instructions for filing my own tax paperwork. At the same time, I was looking up shrubbery for the yard. This was a USDA case. Would that fall under the same guidelines too? It depends on how far you want to reach and attach anything back together.”
On Monday and Tuesday, The Free Press attempted to contact nine of the 12 jurors in the LaRoque case at their homes throughout Eastern North Carolina — two refused to comment and unreturned messages were left for six. A message left for LaRoque attorney Joe Cheshire was also not returned as of press time.
Federal judges are prevented by the Code of Conduct for United States Judges from commenting on pending or impending actions, and a media contact with the U.S. Attorney’s Office said, “We are unable to respond at this time on pending matters.”
Wes Wolfe can be reached at 252-559-1075 and Wes.Wolfe@Kinston.com. Follow him on Twitter @WolfeReports.