UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NORTH CAROLINA EASTERN DIVISION No.

4:12-CR-88-1H(2)

UNITED STATES OF AMERICA REPLY TO GOVERNMENT’S RESPONSE IN OPPOSITION TO MOTION TO DISMISS COUNTS 1 THROUGH 8

v.

STEPHEN A. LAROQUE

In responding to Mr. LaRoque’s motion to dismiss Counts 1 through 8, the government has attempted to unilaterally amend the Second Superseding Indictment in an effort to save those counts. The government also essentially argues that, because it included the words of the statute within the Indictment, the Court should allow it to subject Mr. LaRoque to a prosecution even if Counts 1 through 8 fail to state an offense. The government’s previous theory of prosecution was that Mr. LaRoque defrauded ECDC and PDC, not by defrauding the boards, but merely by controlling them. Now aware that this theory does not constitute a crime, the government posits a new theory: that Mr. LaRoque did defraud the boards, either in obtaining approval of the contracts or in obtaining authorization to accept the loans in question. However, this new theory was not found by the Grand Jury. Instead, it relies on allegations not found in the Second Superseding Indictment, which are inconsistent with the facts the Grand Jury actually found. The Court should reject the

prosecution’s attempt to rely on facts and theories not found by the Grand Jury to support Counts 1 through 8.

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To satisfy the Fifth and Sixth Amendments, the indictment in this case must do more than parrot the language of the statute; it must (1) charge all of the essential elements of a criminal offense and sufficiently apprise the defendant of what he must be prepared to meet so he will not be misled while preparing his defense, (2) protect the defendant against double jeopardy, and (3) be sufficiently specific to ensure that the defendant is prosecuted only on an “indictment of a grand jury.” 1 “Adherence to the language of the indictment is essential because the Fifth Amendment requires that criminal prosecution be limited to the unique allegations of the indictments returned by the grand jury.” Hitt, 249 F.3d at 1016. The government’s prior theory relied on the Grand Jury finding that the boards would approve any measure presented to them. Trying to save Counts 1 through 8, the government has changed course. It now alleges that Mr. LaRoque defrauded the boards. But the government already convinced the Grand Jury that he controlled these boards to such a point that they would have approved any measure he proposed. The government cannot have it both ways. Moreover, nowhere in the Second Superseding Indictment is the allegation that Mr. LaRoque defrauded the boards in relation to the 2009 contract, cf. Second Superseding Indictment ¶1-5-110, or in

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See U.S. Const. amend. VI (“In all criminal prosecutions, the accused shall enjoy the right . . . to be informed of the nature and cause of the accusation[.]”); U.S. Const. amend. V (“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury,” “nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb.”); Russell v. United States, 369 U.S. 749, 770 (1962); United States v. Hayes, 775 F.2d 1279, 1282 (4th Cir. 1985); United States v. Brandon, 298 F.3d 307, 310 (4th Cir. 2002) (When the words of a statute are used to describe the offense generally, they ‘must be accompanied with such a statement of the facts and circumstances as will inform the accused of the specific offense, coming under the general description, with which he is charged.’” (quoting Hamling v. United States, 418 U.S. 87, 117-118 (1974)). United States v. Haas, 583 F.2d 216 (5th Cir.), reh’g denied, 558 F.2d 829, cert. denied, 440 U.S. 981 (1978) (minimal constitutional standards for an indictment require that the defendant be called to answer charges actually brought by the grand jury and not a prosecutor’s interpretation of those charges, that the defendant be apprised of the charge against him in order to permit preparation of a defense, and that he be protected against double jeopardy). 2
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relation to the boards’ approval of the loans at issue, cf. id. at ¶117. Thus, the government’s new theory was not found by the Grand Jury, either because it was not presented or because the Grand Jury rejected it. The grand jury is more than an investigative tool of the government; it is also a constitutionally required shield against unfounded prosecutions. The government’s last minute change of course violates Mr. LaRoque’s rights under the Fifth and Sixth Amendments. The government may not have “a free hand to insert the vital part of the indictment without reference to the grand jury.” United States v. Nance, 533 F.2d 699, 701 (D.C. Cir. 1976) (dismissing indictment for lack of specificity because, without such specificity, “the United States Attorney would have a free hand to insert the vital part of the indictment without reference to the grand jury[,] [and] [t]he law does not vest him with such authority.” ). Because these new allegations and theories were not found by the Grand Jury, the Court should not allow the government to rely on them to support Counts 1 through 8, and because the Grand Jury did not find that Mr. LaRoque defrauded the boards, Counts 1 through 8 fail to state an offense. CONCLUSION North Carolina Policy Watch wrote a series of articles designed to attack then Republican Representative Stephen A. LaRoque. The government took those articles and launched an investigation of its own. For at least 19 months, spending untold amounts of taxpayer dollars, they have attempted to reach a pre-determined result by trying to force square theories of prosecution through round slots required by law. As facts continued to disappoint and its actions were challenged by the accused, the prosecution sought superseding indictment after superseding indictment, all in an attempt to force the square peg into the round slot. When those efforts failed, it now seeks to call its unfit theory a round one by arguing a theory based on facts that the Grand Jury simply did not find. This attempt to fundamentally change the facts and theory on 3
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the eve of trial is not an attempt to do justice or follow the law, but rather to reach a predetermined outcome at all cost. When this type of fluid prosecution occurs, not only can the defendant never know what he or she is defending against, but procedures designed to safeguard the rights and citizens of the United State are tossed aside and injustice prevails. Such is the case here, and this Court should step in and dismiss Counts 1 through 8 of the Second Superseding Indictment for failure to state an offense.2 Respectfully submitted this the 30th day of April, 2013. CHESHIRE PARKER SCHNEIDER & BRYAN, PLLC

/s/ Joseph B. Cheshire, V Joseph B. Cheshire, V N.C. State Bar # 5543 P. O. Box 1029 Raleigh, NC 27602 Phone: (919) 833-3114 Fax: (919) 832-0739 Joe.Cheshire@cheshirepark.com

/s/ Elliot S. Abrams Elliot S. Abrams N.C. State Bar# 42639 Elliot.Abrams@cheshirepark.com Attorneys for Defendant

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While unnecessary to the resolution of this Motion, Mr. LaRoque recognizes government’s assertion, on Page 9 of its Response, that Mr. LaRoque’s “claim that the unsigned contracts entitled him to a yearly salary of ‘three percent of the assets held by those organizations annually’ is false.” The government’s assertion contradicts the sworn Grand Jury testimony of the individual who was authorized by the ECDC board to enter into the contract on behalf of ECDC. (Mr. LaRoque respectfully refers the government to the Grand Jury testimony of the “Senior Board Member,” at P. 28 Lines 20 -25 and P. 32 Lines 3-7.) Thus, the government’s position differs from the position taken by both parties to the September 1999 contract. 4
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CERTIFICATE OF SERVICE I hereby certify that I have this day served a true and correct copy of the foregoing MOTION through the electronic service function of the Court’s electronic filing system, as follows: Dennis Duffy Assistant United States Attorney 310 New Bern Avenue Federal Building, Suite 800 Raleigh, NC 27601-1461 This the 30th day of April, 2013. /s/ Joseph B. Cheshire, V Joseph B. Cheshire, V CHESHIRE PARKER SCHNEIDER & BRYAN, PLLC P. O. Box 1029 Raleigh, North Carolina 27602 Tel: (919) 833-3114 Joe.Cheshire@cheshirepark.com (Dennis.Duffy@usdoj.gov)

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