The Pulse

Former state Rep. LaRoque looking for money from Kinston non-profit he’s accused of stealing from

By: - August 19, 2014 1:05 pm

Former state Rep. Stephen LaRoque wants back pay from the non-profit he founded – the same federally-funded group that prosecutors contend he stole $300,000 from while serving as its executive director.

LaRoque, a Kinston Republican who resigned from the state legislature in July 2012 following his federal indictment, filed a breach of contract lawsuit in May in Lenoir County Superior Court against the East Carolina Development Company. The non-profit was one of two non-profits LaRoque ran as part of a U.S. Department of Agriculture rural lending program intended to offer low-interest loans to struggling businesses in rural areas.

LaRoque-PCLaRoque is seeking $58,500 for what he contends is six months of work he was never paid for in 2012 and nearly three months worth of pay and benefits following his termination from the non-profit after his federal indictment, according to the court documents.

“Defendants have willfully breached the Agreement by failing to pay the agreed upon salary, benefits and give 90 days notice of agreement termination [sic] despite multiple requests from Plaintiff,” LaRoque wrote in the lawsuit, which he filed on his own behalf.

Nowhere in his four-page complaint nor in East Carolina Development Company’s brief answer denying any wrongdoing is any mention of the federal charges and controversy.

The lawsuit (see below) has been stayed until after LaRoque’s February criminal trial is over, meaning it won’t move forward until that trial is over, said Mikael Gross, a Raleigh attorney now representing LaRoque in the Lenoir County lawsuit.

Federal prosecutors contend LaRoque dipped into the non-profit’s bank accounts funded with federal dollars to pay for a lavish lifestyle, and used $300,000 to buy cars, a Greenville ice skating rink, a house for his stepdaughter and expensive jewelry and replica Faberge eggs for his wife.

LaRoque has maintained he has done nothing wrong, and that the money in question was all owed to him under the terms of his contract.

Guilty verdicts handed down in a 2013 trial on the federal charges were thrown out after a juror admitting doing his own research on tax rules, a violation of court rules that contend jurors must not conduct their own research in trials.

The federal investigation began after a 2011 N.C. Policy Watch investigation found the nonprofits LaRoque ran were overseen by a board of directors that consisted of his immediate family members, and that LaRoque reported receiving generous salaries of up to $195,000 a year and approved loans for close associates and two fellow Republican state lawmakers. The U.S. Department of Agriculture also had scant oversight of the rural lending program that gave millions to LaRoque’s non-profit, and was unaware at the time of the high pay LaRoque was earning.


Laroque Lawsuit by NC Policy Watch

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Sarah Ovaska-Few

Sarah Ovaska-Few, former Investigative Reporter for N.C. Policy Watch for five years, conducted investigations and watchdog reports into issues of statewide importance. Ovaska-Few was also staff writer and reporter for six years with the News & Observer in Raleigh, where she reported on governmental, legal, political and criminal justice issues.