29 Dec

Stephen LaRoque, former chairman of the North Carolina House Rules Committee, was indicted this summer on eight counts of money laundering and theft. Federal prosecutors recently added four more charges to LaRoque’s growing list of federal offenses, including tax evasion and knowingly filing false tax returns.

LaRoque managed two non-profit organizations, including the East Carolina Development Company, tasked with providing federal dollars to small businesses in rural communities that could otherwise not secure bank funding to build or grow. Federal prosecutors charge that rather than lending the money to small businesses, LaRoque appropriated much of it for his own use and enjoyment.

Federal money was used to purchase gifts for LaRoque’s wife, including jewelry, Faberge eggs and even an ice-skating rink, as well as a home that he would use as a rental property. LaRoque allegedly padded his own salary with federal money and used it to finance his own campaign.

Two other members of the NC General Assembly were implicated in the fraud scheme.

LaRoque allegedly attempted to cover his tracks after receiving a federal subpoena for documents related to the fraud scheme. Federal prosecutors say that he cashed out $100,000 of investments to repay one non-profit and hired an accountant to file revised tax returns for the years in question.

The former NC legislator may or may not face additional state charges for the fraud scheme, including an investigation into possible ethics violations for the money laundering scheme. LaRoque is scheduled for arraignment on the federal charges in February.

Source: Raleigh News Observer, “Former lawmaker LaRoque indicted on four new counts in money-laundering scheme,” December 26, 2012