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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH CAROLINA


EASTERN DIVISION
FILE NO. 4:12-CR-88-H
UNITED STATES OF AMERICA
v.
STEPHEN LAROQUE,
Defendant.

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DEFENDANT'S SENTENCING
MEMORANDUM

NOW COMES the Defendant, by and through the undersigned counsel, who does hereby
submit this Sentencing Memorandum.
Stephen LaRoque is a broken man. After years of criminal prosecution, his political career
is over, his financial standing has shriveled, and he and his wife face serious health issues as they
advance in age. He also bears the stigma of a federal felony conviction. The punishment has
been severe. The question before the court is the additional punishment that is sufficient, but not
greater than necessary, to accomplish the goals of sentencing in 18 U.S.C. 3553(a).
As stated in paragraph 79 of the Presentence Report (PSR), "[t]he defendant is eligible for
not less than one nor more than five years of probation because the offense is a Class C Felony.
18 U.S.C. 3561(c)(1)." The advisory Guideline range suggests an active sentence of 24-30
months, but as this court knows, the range does not control. The court can grant a downward
variance "because the Guidelines sentence itself fails properly to reflect 3553(a) considerations
or because the case warrants a different sentence regardless." United States v. Lymas, 781 F.3d
106, 112 (4th Cir. 2015) (internal citations omitted).
The defense contends Stephen should receive a sentence of probation, subject to additional
conditions as determined by the court in its discretion.

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The Nature and Circumstances of the Offense


The nature and circumstances of Stephens offense are well-known to this court and will
not be recited in detail here. Stephen stands convicted of a nonviolent white collar offense.
Although granted a new trial because of juror misconduct, he entered a guilty plea and saved
substantial time and expense for the court and the government.
The nonviolent nature of the offense suggests that an active sentence is unnecessary,
especially at a time when observers across the political spectrum have decried the problem of
mass incarceration. Exhibit A includes a graph showing the United States incarcerates 716 of
every 100,000 citizens. The next-closest country is Great Britain, with a rate of only 147 per
100,000. Exh. A at 2.
The conservative group rightoncrime.com says that excessive incarceration "represents a
significant expansion of government power. By reducing excessive sentence lengths and holding
nonviolent offenders accountable through prison alternatives, public safety can be achieved
consistent with a legitimate, but more limited, role for government" Exh. A at 4. The groups
"Statement of Principles" has been signed by leading conservative figures such as Ed Meese,
Grover Norquist, and William Bennett. http://rightoncrime.com/statement-of-principles
The problem is of particular note to the United States Sentencing Commission. The
Commission's Chair met six months ago with the Charles Colson Task Force on Federal
Corrections. She advised the Task Force that one of the goals of the Sentencing Commission
was "reducing costs of incarceration and overcapacity. Exh. A at 7. She noted that as of
September 30, 2014, the federal prison system was thirty percent (30%) overcapacity. Exh. A at
7, n.11. She also stated that "as more resources are needed for prisons, fewer are available for
other components of the criminal justice system that promote public safety, including law

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enforcement officers, prosecutors, assistance to victims, and crime prevention programs." Exh.
A. at 7.
One way to begin solving the problem is fashioning sentences for nonviolent offenders that
do not include incarceration. The nature and circumstances of Stephen's offense encompass
paper and money, not guns and drugs. His case is appropriate for a sentence of probation.

The History and Characteristics of the Defendant


Stephen LaRoque was born and raised in Kinston. He graduated from Kinston High
School and went on to earn degrees at East Carolina University. He was elected multiple times
to the North Carolina House of Representatives, serving from 2003 through 2006 and again from
2011 to 2012, until he was forced to resign due to the federal indictment. He represented the
Tenth District, including parts of Lenoir, Wayne, and Greene Counties.
Stephen was an active and effective legislator. He rose through the ranks to become CoChair of the House Rules Committee. Stephen worked hard to advance causes he believed were
good for North Carolina. At least one of his achievements continues to bring economic benefit
to our state.
As shown by the materials in Exhibit B, Stephen was the lead Primary Sponsor of "pop the
cap" legislation, a measure he was convinced would create jobs. Stephen was the person fully
responsible for explaining the bill and answering questions in state House and Senate
committees, as well as on the House floor. The law passed and allowed production of beverages
with a higher percentage of alcohol. According to the news report in Exhibit B, it has led to the
growth and development of a $791 million craft beer industry in North Carolina.
Stephen was also the lead Primary Sponsor of the Annexation Reform Act of 2011. North

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Carolina traditionally allowed cities and towns to expand by annexing rural areas at will. The
bill ended the process of forced annexation by requiring a vote to be taken among the people in
the area to be affected. The bill impacted nine annexations across North Carolina and saved
money for thousands of people who could not afford the extra taxes and fees that would have
come with annexation.
Stephen is married to Susan LaRoque, and they are both experiencing health problems.
Stephen is 51 years old, turning 52 on August 15. Stephen has diabetes and takes eight to ten
medications each day. A summary of his medical status is attached as Exhibit C, and it notes he
needs frequent monitoring.
Susan is 59 years old and suffers from Chronic Obstructive Pulmonary Disease. As shown
by her medical records attached as Exhibit D, she is also scheduled to have serious spinal surgery
in the near future. "She has upcoming spine surgery that may require 6 months rehabilitation and
will require significant help during that time. . . However, with adequate dedicated help, this may
prevent her from being institutionalized." Exh. D, 2/19/15 Letter from Dr. John Fogarty, M.D.,
Physicians East. Her conditions include spinal stenosis, foraminal narrowing, facet disease, and
degenerative disc disease.
Stephen needs to be home to care for Susan. He also needs to be home to assist with
Susan's flooring business. Susan had sold her business because of declining health, but Stephen
and Susan are in the process of reopening it so they can support themselves financially going
forward. With Susan's upcoming surgery, the burden of running the business will fall primarily
on Stephen.
Finances are a major concern. As shown in paragraph 57 of the PSR, Stephen's monthly
cash flow is in the red by $2,640.00. He would estimate his net worth was more than $1 million

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at the time he was indicted. It is now substantially reduced. The net worth figure in the PSR is
roughly $500,000.00 too high as to Stephen because 1) it includes Springwood Lane real estate
in Kinston valued at $236,000.00, which belongs to Susan, not Stephen, and 2) it will be reduced
by the $300,000.00 in restitution due under the plea agreement.
In addition, the house on Hodges Road in Kinston is subject to an imminent foreclosure
sale by the Local Government Employees' Credit Union. Stephen is bleeding financially and
will need to run the flooring business when Susan cannot.
Stephen's history and characteristics are also shown in the character letters attached as
Exhibit E, a few of which are representative of the whole. Kinston Mayor BJ Murphy "know[s]
Mr. Laroque to be hard working, smart, and community minded. He gave people opportunities
to be involved in civic affairs, earn an honest living and grow professionally." Dr. Richard
Cummings writes, "I have known Stephen as a hard-working, family man who had dedicated his
life to the betterment of his community."
Lenoir County Commissioner Eric Rouse says that [f]ew people have done as much as
Stephen to help others and his community on a range of issues and at such a deep personal cost.
The current President of the American Association of Nurse Anesthetists, Sharon Pearce, worked
with Stephen while he was a legislator. "I found him reasonable and willing to listen to the facts
regarding the bill irrespective of whether the opposing group had donated large sums to his
campaign."

Deterrence
The sentence imposed should deter the defendant specifically and society generally from
committing a similar offense. 18 U.S.C. 3553(a)(2)(B) and (C).

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As to the defendant specifically, he has no prior record of criminal activity. Given his age
and otherwise clean record, Sentencing Commission data shows he is unlikely to commit a
further offense. http://www.ussc.gov/sites/default/files/pdf/research-and-publications/researchpublications/2004/200405_Recidivism_Criminal_History.pdf at 12. "Recidivism rates decline
relatively consistently as age [at sentence] increases. Generally, the younger the offender, the
more likely the offender recidivates. . . Among all offenders under age 21, the recidivism rate is
35.5 percent, while offenders over age 50 have a recidivism rate of 9.5 percent." Id. The
Commission also notes that someone like Stephen, with zero criminal history points, is also the
least likely to commit a further offense. Id. at 7-8, 23.
As to society generally, a felony conviction sends the message that the court treats
financial crime seriously. Stephen's case could have been handled as a civil matter by the
government, but it was not. Stephen could have been allowed to plead to a misdemeanor, but he
was not. Anyone aware of Stephen's case will know to avoid similar offense conduct because it
leads to vigorous felony criminal prosecution in federal court. Such prosecution is also sufficient
to reflect the seriousness of the offense, to promote respect for the law, and to provide just
punishment under 18 U.S.C. 3553(a)(2)(A).

Avoid Sentence Disparity


Federal judges across the country have imposed probation in white collar cases in recent
years. Imposing a sentence of probation on Stephen will avoid unwarranted sentence disparity
with the following cases (all judgments attached as Exhibit F):
1. Dinesh D'Souza, Southern District of New York, September 23, 2014: pled guilty to
one count of campaign contribution fraud. The court imposed a sentence of probation for five

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years, with the first eight months to be served in a community confinement center, plus a
$30,000.00 fine.

Media reports stated the advisory Guideline range was 10-16 months.

http://www.nytimes.com/2014/09/24/us/dsouza-is-spared-prison-time-for-campaign-financeviolations.html?_r=0
2. H. Ty Warner, Northern District of Illinois, January 14, 2014: pled guilty to one count
of tax evasion. The court imposed sentence of probation for two years, with a requirement of
500 hours of community service, plus a $100,000.00 fine.

Case currently pending on

Government's appeal to the Seventh Circuit (docket number 14-1330). His plea agreement
anticipated a Guideline range of 46-57 months.
3. Abby Cole, District of Minnesota, December 20, 2010: pled not guilty and convicted at
trial of conspiracy to commit mail fraud and wire fraud, as well as multiple counts of tax
evasion. Restitution amount was $36 million. The court imposed a sentence of probation for
three years. The Government appealed, and the sentence was affirmed. Coles sentencing
guideline range was 135-168 months. United States v. Cole, 765 F.3d 884, 885 (8th Cir. 2014).
[T]he district court here . . . has adequately explained the sentence and appropriately considered
the section 3553(a) factors in varying downward to a probationary sentence, making precisely
the kind of defendant-specific determinations that are within the special competence of
sentencing courts. Id. at 887 (internal citations omitted).
While no two cases are exactly alike, it is clear that federal judges do not hesitate to impose
probation in an appropriate white collar case.

Restitution
Stephen pled guilty to Count One of the indictment, with a $150,000.00 loss amount. But

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Stephen agreed as part of the plea to pay restitution in the total amount of $300,000.00, reflecting
all four loans that were the subject of the indictment. Two of the loans were from ECDC
($200,000.00) and two were from PDC ($100,000.00).
Stephen will have the restitution available at sentencing pursuant to the Amended Consent
Restraining Order signed by the court and filed at Docket Entry #277. It will consist of the three
pieces of real estate listed in the order, along with liquid cash from the dedicated trust account in
the amount of $56,100.00. The current balance of the dedicated trust account with interest is
$56,127.21.
Three points bear mentioning in regard to the restitution. First, Stephen earlier repaid the
$200,000.00 in loans to ECDC and is now, in effect, repaying them again. Attached as Exhibit G
are copies of the checks and deposit slips showing the earlier repayment in September 2011.
Second, Stephen received no compensation for his work with PDC, other than the
$100,000.00 in loans, which he later declared as income. Stephen established PDC in the
Piedmont based primarily on a request from the United States Department Agriculture because
of the need for jobs in the region. Repaying the PDC loans as part of the restitution due at
sentencing means Stephens work for PDC was essentially uncompensated.
Third, the defense would request that the money in the dedicated trust account be held
there until the conclusion of a pending state civil action for breach of contract between Stephen
and ECDC. As shown by the documents attached as Exhibit H, Stephen resigned from the
ECDC and PDC board of directors on January 27, 2012. He was hired as an employee of ECDC
with an employment contract effective February 1, 2012. He continued as an employee under
the terms of the contract until his position was eliminated after indictment in 2012.
ECDC did not pay Stephen the money promised under the 2012 employment contract, and

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Stephen is seeking to recover those funds in the pending state lawsuit. This is the matter noted in
paragraph 60 of the Presentence Report. It is contended that ECDC owes $60,200.00 to Stephen
under the contract.
It is counsel's understanding that ECDC likely lacks the funds needed to pay the amount
sought. As a result, it appears that even if Stephen is successful in getting a judgment against
ECDC in state court, he will be unable to enforce it.
The defense requests that the court authorize defense counsel to maintain the $56,127.21 in
the dedicated trust account until the conclusion of the state civil suit in Lenoir County. The court
has authority to order payment of restitution in "a single, lump-sum payment, partial payments at
specified intervals, in-kind payments, or a combination of payments at specified intervals and inkind payments." 18 U.S.C. 3664(f)(3)(A). The defense requests entry of an order providing
that the specified interval for payment of the restitution funds in the dedicated trust account be
the point at which the state lawsuit is resolved in ECDC's favor. If not resolved in ECDC's
favor, the funds would be returned to Stephen.

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CONCLUSION
For the reasons shown above, the Defendant respectfully submits that a sentence of
probation is sufficient, but not greater than necessary, to achieve the purposes of 18 U.S.C.
3553(a).
This the 30th day of June, 2015.

LAW OFFICES OF KEITH A. WILLIAMS, P.A.


By: /s/ Keith A. Williams
KEITH A. WILLIAMS
P.O. Box 1965
321 South Evans Street, Suite 103
Greenville, NC 27835
Phone: 252/931-9362
Fax: 252/830-5155
N.C. Bar Number 19333
E-mail: keith@williamslawonline.com
CHRIS ROGERSON LAW OFFICE
By: /s/ Chris Rogerson
CHRISTOPHER A. ROGERSON
123 East Caswell Street
Kinston, NC 28501
Phone: 252/527-3331
Fax: 252/527-7907
N.C. Bar Number 23883
E-mail: chrisrogerson@rocketmail.com

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CHESHIRE PARKER SCHNEIDER & BRYAN, PLLC.


By: /s/ Elliot Abrams
ELLIOT ABRAMS
P.O. Box 1029
Raleigh, NC 27602
Phone: 919/833-3114
Fax: 919/832-0739
N.C. Bar Number 42639
Email: elliot.abrams@cheshirepark.com

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CERTIFICATE OF SERVICE
The undersigned hereby certifies that on the date shown below, he electronically filed the
foregoing with the Clerk of Court using the CM/ECF system which will send notification of such
filing to the following: Assistant United States Attorney Dennis Duffy.
This the 30th day of June, 2015.

LAW OFFICES OF KEITH A. WILLIAMS, P.A.

By: /s/ Keith A. Williams


KEITH A. WILLIAMS
P.O. Box 1965
321 South Evans Street, Suite 103
Greenville, NC 27835
Phone: 252/931-9362
Fax: 252/830-5155
N.C. Bar Number 19333
E-mail: keith@williamslawonline.com

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