Stephen LaRoque is leaving the state House of Representatives but his legal troubles are rippling across the General Assembly.
LaRoque was indicted by a federal grand jury on charges of money laundering and theft from a program that receives federal funds. He has operated an enterprise that loaned federal money to struggling businesses.
First, House Speaker Thom Tillis was under pressure to take quick action, since LaRoque, a Kinston Republican, was one of his lieutenants. Tillis named him co-chairman of the powerful Rules Committee and put him in charge of other committees.
LaRoque abruptly resigned after Tillis said he would hold public hearings into his conduct.
Then there are his former colleagues.
Two colleagues in the legislature who received federal loans from him have resigned, although both say it had nothing to do with LaRoque. Sen. Debbie Clary, a Republican who represented Cleveland and Rutherford counties, announced in June she would resign in November. Questions about LaRoque's re-lending enterprise surfaced publicly in August.
Rep. Mark Hilton, a Republican from Catawba County, didn’t seek re-election this year.
Clary, who is now a lobbyist, was an ally of LaRoque’s from the time he arrived in the General Assembly in 2002, amid a time of divisiveness between two camps of Republicans fighting for control of the caucus.
In 2003, LaRoque formed Piedmont Development Co., a second nonprofit entity to make federal loans in 11 western counties. Clary was on its board of directors. Three years later, Clary asked LaRoque if she could get a loan to buy the building in Shelby where her marketing firm rented space, according to the indictment.
LaRoque said she could but would have to resign from the board, the indictment says, which she did and obtained a $134,000 loan.
In June 2007, PDC loaned $150,000 to Hilton’s property management company. Hilton told The News & Observer last year that the loan allowed him to buy more than three dozen mobile homes to expand his mobile home park. In January 2008, PDC made a $185,000 loan to the construction company that leased the land to Hilton, the indictment says.
LaRoque ran for re-election in 2008, and loaned $28,000 from his for-profit management company to his campaign committee, state elections records show. LaRoque paid a campaign consultant more than $58,000 around that time, records show.
He lost the election, and in 2010 an investigator for the state Board of Elections began taking a closer look at the 2008 campaign loans.
An elections board investigator asked LaRoque if his management firm received money from his nonprofit organizations, and he replied that his firm had a management contract with them, according to the indictment. He didn’t disclose that his for-profit firm had received $250,000 from ECDC, the indictment says.
LaRoque was elected again to the House in 2010, and defeated in the May primary this year. His term would have expired at the end of this year.