Greenville, N.C. — A federal judge ruled Tuesday that former Rep. Stephen LaRoque is entitled to a new trial on charges that he misused federal funds.
The Kinston Republican was convicted last June of four counts each of misuse of funds, money laundering and fraud, but two of the 12 guilty verdicts were later set aside after it was learned that a juror conducted outside research in the case.
Senior U.S. District Judge Malcolm Howard now agrees with LaRoque that all of the guilty verdicts should be thrown out and the case retried.
Federal prosecutors say LaRoque directed $300,000 from a U.S. Department of Agriculture loan program for small-business development that he administered to friends and family and might have used some for campaign expenses. They allege that he also lied on USDA documents and filed false tax returns.
LaRoque has maintained that loans from the USDA fund to two nonprofits he directed were more like advances on money owed to him by the nonprofits because often he didn't take all of his required salaries. His attorneys have argued that the boards of the two nonprofits approved LaRoque's actions, so it was his money to spend as he saw fit.
Also Tuesday, Howard approved the request of defense attorneys Joe Cheshire and Elliott Abrams to withdraw from the case. They were replaced by Keith Williams and Chris Rogerson.
LaRoque resigned his House seat in 2012 under pressure after his indictment.