Former state legislator Stephen LaRoque of Kinston was already facing eight federal criminal counts this year regarding the alleged misuse of funds from his small-business lending enterprises, but he will go into 2013 facing 12 counts.
The U.S. Attorney’s Office for the Eastern District of North Carolina indicted LaRoque in mid-July on four counts of theft and four counts of misappropriating money meant to be loaned to struggling small business owners for his personal use.
Four new charges were filed against him this month, including concealing “material facts,” materially false, fictitious and fraudulent representation, and two counts of making and subscribing a false tax return, according to online court records viewed Wednesday.
An updated 75-page indictment, signed by Assistant U.S. Attorney Dennis M. Duffy, was filed Dec. 20.
LaRoque founded the nonprofit East Carolina Development Company Inc. (ECDC) in 1997 to lend money to owners of small businesses in Eastern North Carolina who could not otherwise obtain a loan, and the nonprofit Piedmont Development Company Inc. (PDC) in 2003 to support businesspeople in Western North Carolina.
The money for that assistance comes from the U.S. Department of Agriculture’s Rural Development division in the form of grants and loans. The proceeds from the loan repayments are then lent to new borrowers.
The U.S. Attorney’s Office alleged LaRoque stacked the nonprofits’ boards with close business associates and family members — including his wife and brother — paid himself a six-figure salary and used funds designated for loans to purchase personal vehicles, a home, help his wife invest in a business and buy expensive gifts such as Faberge eggs and jewelry.
In the updated indictment, it was alleged LaRoque “did knowingly and willfully falsify, conceal, and cover up, by trick, scheme, and device material facts,” including the “creation and execution” of a new compensation agreement with the ECDC and PDC boards in January 2009, the boards’ approval of loans to a business that he had “an ownership interest” in and a $300,000 withdrawal from the ECDC bank account for LaRoque’s personal use.
The 10th count alleged LaRoque stated in a 2009 “United States Department of Agriculture-Rural Development-Security Agreement” that “ ‘[s]tatements contained in the Debtor’s [ECDC] loan application (s) are true and correct,’ when, in truth and fact, a statement in the loan agreement was false.”
The 11th and 12th counts alleged LaRoque “willfully” filed false income tax returns for 2009 and 2010 that “understated the amount of tax liability” he and his wife owed those years.
LaRoque has retained attorney Joseph B. Cheshire V of Raleigh for his defense, but Cheshire could not be reached for comment Wednesday. He has maintained his client’s innocence, however.
A trial date has been set for Feb. 12, 2013, in the U.S. District Court in Greenville.
David Andersoncan be reached at 252-559-1077 or David.Anderson@Kinston.com. Follow him on Twitter at DavidFreePress.