The trial of former state Rep. Stephen LaRoque began May 20 in federal court.
Prosecutors say Laroque took U.S. Department of Agriculture funds set aside to help struggling rural business owners as part of the Rural Business Enterprise Grant program.
Assistant U.S. Attorney Dennis Duffy said Laroque used a complex scam to steal $300,000 in federal funds. Other charges include attempts to conceal theft and avoiding taxes through “sham loans,” according to The News & Observer.
LaRoque has faced many accusations about the way he spent federal- and state-issued money in the past.
In early 2011, some of LaRoque’s political rivals began questioning where his additional salary was coming from. That, in turn, prompted an investigation by N.C. Policy Watch.
N.C. Policy Watch found that LaRoque allegedly pocketed some of the $582,000 which was supposed to go toward the Rural Grant Program. He allegedly used this money to cover his salary and gave some to friends.
Investigators are also looking into his involvement with the East Carolina Development Company and Piedmont Development Company, two small economic organizations.
Laroque earned almost $195,000 a year heading the two non-profits. He then used the proceeds to loan public funds to close associates and political allies, according to the N.C. Policy Watch.
Also under investigation is the Kinston-based for-profit LaRoque Management Group, owned by Laroque and his brother. Investigators say LaRoque used his company to funnel money from the nonprofits into his own pockets.
Duffy said LaRoque has used various means to cover up his extra earnings, like failing to report his financial dealings on state ethics forms and hiding from the N.C Board of Elections that he had diverted loan money to his campaign.
LaRoque has reportedly tried to defend himself on comment boards that accuse him of illegal handling of federal money. Under a Huffington Post story saying LaRoque had hired an unemployed worker to clean his yard, LaRoque wrote he had done a good deed for the lack of money he earns.
“My wage rate as an NC Legislator is $6.71 an hour,” LaRoque wrote. “How many unemployed have you offered work to?”
The comments of LaRoque and other commentators made Sarah Ovaska, an investigative reporter for N.C. Policy Watch, curious about LaRoque’s use of government money, according to The Huffington Post. She subsequently opened a two-month investigation.
Michael Cobb, associate professor of public and international affairs who also studies scandals, said that LaRoque’s scandal isn’t likely to end his political career, because it was already over. Cobb noted that the last two times LaRoque has ran for public office he was defeated both times.
Cobb said if the scandal was the only thing hindering his career as a politician, his career might be salvageable.
“Plenty of politicians can come back after scandals,” Cobb said. He added that it is likely that people eventually forget the wrongdoing.
Cobb said it is not uncommon for politicians to “take advantage of a situation that you and I don’t have.”
The case has become personal for LaRoque, because his brother, Walter LaRoque, testified against him on Tuesday.
Walter LaRoque said he never saw or signed a contract dealing with his involvement with East Carolina Development Company, according to the Kinston Free-Press.