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RSI's Bala will serve 27 months: Founder denies wrongdoing

The owner of Racing Services Inc. continued to claim innocence Thursday as a federal judge sentenced her to 27 months in prison for her role in the largest illegal gambling case in North Dakota history.

The owner of Racing Services Inc. continued to claim innocence Thursday as a federal judge sentenced her to 27 months in prison for her role in the largest illegal gambling case in North Dakota history.

"I just want you to know, in my heart, I would never do anything illegal," Susan Bala, dressed in all white, told U.S. District Court Judge Ralph Erickson in Fargo.

Erickson gave Bala the minimum sentence under federal guidelines.

The U.S. attorney's office recommended Bala receive the maximum of 33 months in prison for her 12 felony convictions.

A jury found Bala guilty Feb. 4 of running an unlicensed betting parlor in south Fargo. Prosecutors said the site took in more than $99 million in bets from October 2002 to April 2003 without paying state taxes or a charity as required by state law.


Erickson initially appeared to be leaning toward the harsher sentence, calling Bala's claims that she didn't do anything illegal "baffling."

He chastised her for bringing "unsavory characters" to North Dakota, including an alleged member of the Gambino crime family now under federal indictment in New York.

"I agree with the government, it's very serious," Erickson said. "It's about as bad as I can imagine."

The judge then switched gears and said that in light of Bala's past good deeds, spotless record and low risk, she deserved the low end of the sentencing guidelines.

Bala, 50, will begin serving her prison sentence Aug. 31, likely at a minimum-security prison, said Assistant U.S. Attorney Keith Reisenauer.

With time off for good behavior, Bala could be out of prison in about two years. She also received two years of supervised probation.

Asked whether he thought the sentence was too light, U.S. Attorney Drew Wrigley said the important thing was Bala is going to prison.

"The guidelines are what they are ... and the judge called that as he saw it," Wrigley said.


Bala said she will appeal the sentence.

Her attorney, Mark Beauchene, said they may also ask for a stay of sentence pending the appeal. Racing Services Inc. was ordered to forfeit $99 million, of which Bala will be responsible for $19.7 million.

Erickson decided not to impose additional fines on the company, which was North Dakota's first and only simulcast service provider until losing its license Jan. 1, 2004. Most of RSI's assets have been liquidated.

"The company's kind of received the death penalty in this thing," Erickson said.

The judge considered a number of factors in Bala's sentencing, including what he called an unusually large number of letters supporting her character and asking for leniency.

Bala didn't know about errors in the betting operation that caused $6.5 million in state taxes to go unpaid, and she tried to correct them as soon as she found out about them, Beauchene said.

However, the judge agreed with Reisenauer that Bala hadn't accepted responsibility for her criminal activity.

"There was never any intention here to follow the laws and regulations of the state until she was caught," Reisenauer said.


North Dakota taxpayers, charities and RSI employees were the victims of Bala's actions, Reisenauer said.

"She blames everybody but herself," he said.

Bala told Erickson she wasn't making excuses for herself or her company.

"I'm simply stating all the facts as they were," she said.

She said she had no reason to jeopardize the business she worked 15 years to build.

"To me, it seems I would have to be insane or very foolish to do this," she said.

Bala thanked family members for their support, including the parents of former RSI vice president Raymundo Diaz Jr., whose Global Contact Inc. offices housed the unlicensed gambling operation.

Diaz pleaded guilty to three felony charges and testified against Bala, his former girlfriend, in exchange for a lighter sentence.


"It came down to those two being pitted against one another, and they had a long-term relationship that may have been irreparably damaged," Beauchene said.

Diaz's parents sat behind Bala in the courtroom Thursday and walked away with her arm-in-arm from the federal courthouse afterward.

Diaz, 39, is currently serving a 90-day sentence at the Fargo halfway house Centre Inc., to be followed by 60 days of electronic home monitoring, two years of probation and 100 hours of community service.

Beauchene asked Erickson to give Bala a similar sentence.

State illegal gambling charges against Bala, RSI, Diaz and Global Contact were dismissed April 1 for being too similar to the federal charges.

Attorney General Wayne Stenehjem said the state doesn't expect to recover the $6.5 million in unpaid taxes but will continue to pursue it.

The RSI scandal was watched closely by horsemen around the country and has done "great harm" to the reputation of North Dakota's horse racing industry, Stenehjem said.

"She will never be engaged in the gaming industry in North Dakota again, I can guarantee that," he said of Bala. "And probably nowhere else, either."


Readers can reach Forum reporter

Mike Nowatzki at (701) 241-5528

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