Attorney: Indicted lawmaker 'loaned money properly'

Former Republican Rep. Stephen LaRoque of Kinston made his first court appearance in Raleigh. The judge read the charges, described the potential penalties and explained LaRoque's rights.

"Rep. LaRoque looks forward to challenging these allegations and believes that, when he does, the public will see the work that he did was good work, and it was not work that was illegal," defense attorney Joe Cheshire said after the brief court hearing.

LaRoque is accused of taking $300,000 loaned to his nonprofit company through a U.S. Department of Agriculture program to help rural communities and giving it to another company he owned to pay for transactions that helped family members, such as buying a Greenville ice rink and jewelry for his wife and a rental house for one of his stepdaughters. A federal indictment also contends LaRoque transferred funds between the companies to ultimately pay for the personal items.

Cheshire said varied interpretations of complicated USDA loan rules will likely play into LaRoque's defense.

"Rep. LaRoque believes that he earned that money properly that he got and that he loaned money properly," Cheshire said.

LaRoque, 48, resigned last week after being indicted on four counts of theft through converting federal loan proceeds and four counts of engaging in monetary transactions with criminally derived funds. He lost his re-election bid in the May primary.

LaRoque was released on a $50,000 unsecured bond, and he was required to surrender his passport and submit a DNA sample.

Typically, a defendant can't contact potential witnesses in a criminal case, but federal prosecutors eased some of LaRoque's release requirements because his wife, stepdaughter and brother could become witnesses.