Founder of simulcast racing service given 27 months

Dave Kolpack

Friday, July 15, 2005 | 9:55 a.m.

FARGO, N.D. -- A federal judge scolded simulcast racing service founder Susan Bala for failing to protect the state from "unsavory characters" in running what prosecutors said was the largest illegal gambling operation in state history.

U.S. District Judge Ralph Erickson on Thursday sentenced Bala, 50, of Fargo, to more than two years in prison, to be followed by two years of probation.

"It's about as bad as I can imagine," Erickson told Bala before handing down the 27-month sentence. Bala said she would appeal.

Bala and her company, Racing Services Inc., were convicted in February on 12 counts, including conducting an illegal gambling business, conspiracy to conduct an illegal gambling business, illegal wire transfer and nine counts of money laundering.

Prosecutors said about $99 million was wagered at the illegal Fargo site. One of the Racing Services clients is an alleged member of the Gambino crime family charged in a New York indictment for illegal gambling.

Bala had an "obligation to protect the state of North Dakota from these unsavory characters," Erickson said.

Bala, who appeared calm through the hearing, repeated claims from her trial that managers failed to inform her that the company failed to pay license fees or taxes. She told Erickson she would have to be "insane or very foolish" to attempt the scheme.

"In my heart, I would never do anything illegal," Bala said.

It took 15 years to build the company, she said, and, "I had no reason to jeopardize my business."

Erickson said federal sentencing guidelines called for a prison term between 27 months and 33 months. Assistant U.S. Attorney Keith Reisenauer asked for 33 months, telling the judge that Bala has not taken responsibility for her actions.

"She blames everybody but herself," Reisenauer said.

"This is by far the biggest illegal gambling operation in the history of the state of North Dakota," he said.

Raymundo Diaz Jr., the vice president of Racing Services and Bala's former boyfriend, was sentenced in May to 90 days in a halfway house. He had pleaded guilty to three felony charges of illegal gambling.

Bala's attorney, Mark Beauchene, asked for a similar sentence that would combine probation with home confinement.

"I believe Susan Bala is a remarkable individual," he said.

Any mistakes Bala made were "errors of omission, not commission," Beauchene said.

Racing Services was the first company licensed to provide broadcast signals from out-of-state horse races to betting parlors in North Dakota, but authorities said it was not licensed to run its own betting parlor.

Jurors in February ordered Racing Services to forfeit about $99 million, and Bala herself was ordered to pay $19.7 million of that. Reisenauer said he did not know how much of that money would be collected.

"We're going to put all effort that we can into trying to collect as much as we can and try to locate assets that may be elsewhere ... that frankly we don't know exists today," Reisenauer said outside the courtroom.

Bala said she did not regret her decision to go to trial.

"I don't argue with the jury verdict," Bala said after the hearing. "They had to make a decision on what was in front of them.

"We are working to stand up for what we believe in," she said. "We'll shed all the light on this case so it's not in the posture it's in now."