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Thom Tillis tries to deflect ethical questions

U.S. Senate candidate Thom Tillis danced around a question about his recent appointments of big donors to UNC posts and tried to pivot to attack Democratic incumbent Kay Hagan.

In an interview with CQ/Roll Call posted online Thursday, Tillis faced a question about a News & Observer report that showed major donors to his campaign getting seats on the UNC Board of Governors. Tillis called the storyline "tired old arguments" and his appointees "some of the greatest people in North Carolina."

"It is disingenuous at the very best probably misleading or dishonest in reality because (Democrats) did it at levels that we would never allow," Tillis said.

Juror misconduct leads to reduced convictions against LaRoque

A federal judge on Thursday set aside two of the 12 counts on which former state legislator Stephen LaRoque was convicted in June because of juror misconduct during the trial in Greenville.

The night before the verdict, one of the jurors had looked up on a home computer Internal Revenue Service instructions for filling out paperwork for taxes, which included information on S corporations, and mentioned it to other jurors the next day while deliberations were still under way.

Another juror mentioned it to the lead federal prosecutor in the case after the verdict came in, and the prosecutor, Dennis Duffy, reported it to U.S. District Court Judge Malcolm J. Howard. The judge called a closed conference on June 18, in which that juror and two others were questioned.

The juror said he didn’t think he was violating the judge’s order not to do independent research because he thought his inquiries were into a topic that is generally known, and not about a specific person.

LaRoque’s attorneys argued for a new trial on all counts, but Howard ruled that only two of the counts were relevant because they referred to filing false tax returns.

LaRoque is scheduled to be sentenced on Sept. 10. LaRoque was a high-ranking Republican member of the state House from Kinston, who got into trouble with authorities for mishandling funds in a federal loan re-lending enterprise.

The juror was apparently not punished.

LaRoque found guilty on all counts

Former state Rep. Stephen LaRoque has been convicted on 12 counts of federal charges related to accusations that he enriched himself with U.S. Department of Agriculture money that he was supposed to loan to struggling rural business owners.

The verdict came Friday morning in a federal courtroom in Greenville. Sentencing is set for Sept. 10.

The trial began in mid May and involved testimony about complex financial transactions that the government contended amounted to theft and money laundering.

LaRoque, who was represented by Raleigh attorneys Joseph Cheshire V and Elliot Abrams, argued that prosecutors were trying to describe "legitimate transactions" as theft.

Prosecutors contended LaRoque’s defense tried to portray the alleged crimes as “mere ethical lapses” that didn’t constitute crimes. But the prosecutors argued the case was about the theft of $300,000 in federal funds, and LaRoque’s attempts to conceal the theft and avoid taxes through “sham loans.”

The federal jury began their deliberations on Wednesday and came back with their verdict shortly before noon.

-- Anne Blythe

On the stand, LaRoque says he was Tillis' 'right hand man,' denies stealing

Update: The case has gone to a jury in the federal courthouse in New Bern. Jurors will return on Thursday to deliberate.

Former Republican state Rep. Stephen LaRoque took the stand in his defense Tuesday to admit he made mistakes but did not steal from the charities that received federal grant money. Sarah Ovaska, whose investigation prompted LaRoque's indictment, filed this dispatch for N.C. Policy Watch:

"On the stand Tuesday, LaRoque said he didn’t report all of his generous terms of his salary to auditors, accountants and the IRS but instead kept that money in East Carolina Development Company’s accounts with the assumption that he could withdraw it whenever he wanted. ... LaRoque was questioned by both his own defense attorney Joe Cheshire and federal prosecutors Dennis Duffy. Under questioning from Cheshire, LaRoque said he bought his wife expensive jewelry and replica Faberge eggs because, “I love spoiling my wife.” Prosecutors contend he wrote himself large checks from the non-profit in order to pay for that jewelry. ...

"On the July day he was indicted, LaRoque called up the former head of the USDA rural lending program he participated in and said that he (LaRoque) could become the North Carolina head of the USDA office if Mitt Romney won the 2012 election.

LaRoque trial begins Monday in federal court

UPDATED

Former state Rep. Stephen LaRoque will go on trial in federal court in Greenville on Monday on charges that he enriched himself with U.S. Department of Agriculture money that he loaned to struggling rural business owners.

The trial is expected to be protracted because it involves complex financial transactions that the government contends amounted to theft and money laundering. LaRoque, who is represented by Raleigh attorneys Joseph Cheshire V and Elliot Abrams, says he used the money legally.

U.S. District Court Judge Malcolm Howard recently denied LaRoque’s motions to dismiss the charges.

Morning Memo: More strong numbers for McCrory, immigration ads debut

CIVITAS POLL PUTS McCRORY ABOVE 50%: A Civitas poll puts Republican Gov. Pat McCrory's favorability rating at 54 percent, a touch higher than a poll earlier in the week showing it at 49 percent. His unfavorable rating is 30 percent, according to the political nonprofit that traditionally supports Republicans. Look for more numbers on Dome soon.

IMMIGRATION ADS PROVIDE GOP COVER: Americans for a Conservative Direction, a group backed by Facebook founder Mark Zuckerberg, is airing an ad in North Carolina that defends the immigration legislation. The Hill reports that it is targeted at six red-leaning states and designed to support Republicans who favor the plan. From the story: "Anyone who thinks that what we have now on immigration is not a problem is fooling themselves," (Marco Rubio) says in a news clip featured in the ad. A narrator goes on to say that "conservative leaders have a plan," and cites news outlets like McClatchy, CNN and the Washington Post in describing it as "the toughest enforcement measure in the history of the United States," "bold" and "very conservative."

***Happy Friday! Thanks for reading the Dome Morning Memo. A quiet day in N.C. politics. No legislative action and the governor lists no public events. Find more news and analysis below. ***

LaRoque: Entitled to federal money he managed, so not stolen

Updated: Former state Rep. Stephen LaRoque’s defense to the federal indictment charging him with theft, money laundering and tax offenses hinges on a simple theory:

LaRoque was legally entitled to the federal funds he received as the middle-man in a rural re-lending program, and so he could not have stolen the money.

LaRoque’s attorneys make that claim in a motion filed earlier this week. The former Republican representative from Kinston is scheduled to go on trial in U.S. District Court in Greenville on May 20.

LaRoque trial postponed again

Former state Rep. Stephen LaRoque's trial on federal fraud charges has been postponed from Feb. 12 to May 14. The postponement -- the second time the trial has been delayed -- is because new charges were filed against the Kinston Republican last month.

Federal Judge Malcolm Howard granted the request from the prosecution and defense, citing the complex nature of the case.

LaRoque, who resigned from the General Assembly after he was indicted in July, faces 10 counts, including fraud and tax offense allegations.

He is accused of enriching himself with business-stimulus money from a U.S. Department of Agriculture loan program, through non-profit entities he set up to make the loans.

Morning Roundup: Auto insurers prepare for big push at General Assembly

As the legislative session approaches, interest groups are gearing up for a fight. A divided auto insurance industry will try again next year to change a unique regulatory system in North Carolina, which enjoys some of the lowest rates in the country. Read more here.

More political headlines below:

-- A former top Republican lawmaker faces new federal charges, including tax evasion, in connection with an alleged scheme to launder money from a government loan program to enrich himself and close associates.

--Advocates for injured workers say the state needs a safety net to catch vulnerable workers. They want state leaders to create a fund to pay for lost wages and medical bills quickly so these workers aren’t left destitute while their employers try to pay the claim.

Former GOP lawmaker faces new charges in alleged money-laundering scheme

Federal prosecutors indicted a powerful former Republican state lawmaker on four new counts, charging him with filing false tax returns and trying to hide an alleged scheme to launder federal loan money to enrich himself and close associates.

The new charges – which raise the total number to 12 – accuse former Rules Committee Chairman Stephen LaRoque of submitting false 2009 and 2010 tax returns, concealing actions to divert money for personal use and making false statements to the federal government.

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