Ms. Bala vindicated in bet scandal

Jul 21, 2009 5:03 PM
Burnt Offerings by Stan Bergstein |

You may not know who Susan Bala (pictured) is, but if you ever saw her you would not forget her, and if you ever met her you would be hugely impressed.

She is a beauty, a striking brunette and stylish dresser. But she also is an exceptionally intelligent, resourceful and successful woman, or was successful until wolfish lawyers who have since been rebuked and are now being sued by her, tore her to shreds and sent her to federal prison … unlawfully, it turns out.

She did not go quietly, and she fought and clawed back, and won.

Some years ago, far ahead of the curve that led to widespread account betting, and a forerunner of rebate shops of today, Susan Bala formed Racing Services Inc. in her home town of Fargo, North Dakota.

It was an unlikely site, perhaps best known to most by Joel and Ethan Coen’s movie of the same name, starring William H. Macy and Steve Buscemi, back in 1996.

The Fargo of Susan Bala was where Ms. Bala, after attending North Dakota State, opened a ladies’ specialty shop and jewelry store downtown. She ultimately helped form a limited partnership, in which 21 Fargo doctors reportedly bought shares at $49,000 a throw. Thirteen of them sued, claiming Susan and her partners had paid themselves big salaries and ran the business into bankruptcy. They won a $400,000 judgment, but not against Susan. When a new owner bought the business, he hired Susan to run it.

Three writers for the Fargo Forum newspaper – Janell Cole, Mike Nowatzki and Steven Wagner – wrote a fascinating history of Susan’s road to riches. She spent two years nursing her mother, who was dying of cancer, then tackled the problems of a failing company called Palace Supply, known in Fargo as Jackpot, which supplied pull-tab tickets to North Dakota’s charities.

That enterprise effort failed too, but gave Susan the idea that gambling could be profitable, if run smartly. She tried to open a racetrack, but soon decided there were not enough people in Fargo, or anywhere close, to make it work. She began attending racing conferences in Arizona and elsewhere, learning the business.

She soon decided to take racing to the people instead of trying to bring them to the racetrack. And not just from around Fargo. She found an investor in Dee Hubbard, of Hollywood Park and Ruidoso Downs renown, and others, and formed Dakota Race Management.

The partners drifted away, and Susan became president, chief executive officer and sole owner. That is when she renamed the business Racing Services, Inc., and she was on her way.

Her company in remote Fargo became the home of a rebate shop that drew tens of millions of dollars in bets from big gamblers across America. A racing security specialist went and inspected it, and reported that it was a huge and well-run operation.

Federal prosecutors thought differently, and charged Ms. Bala with running a major illegal gambling operation. A jury agreed, and in 2005 she was sentenced by a judge to 27 months in the federal penitentiary in Pekin, Illinois, on 12 felony counts, and held personally responsible for $19.7 million owed the government.

While in prison she spent 523 days of her life, studying religion and art, "as an expression of what was going on inside me," and teaching fellow prisoners.

Then, while making a cup of instant oatmeal in March two years ago, she was called to the prison office, and saw through a window reporter Steve Wagner. Her first thought was that something dire had happened to a family member.

Wagner had happier news. She was free.

A federal appeals court had thrown out her conviction. The 8th U.S. Circuit Court of Appeals ruled that the evidence that had sent her to prison was insufficient to convict her, and that local and federal lawyers had failed to prove the charges and had pursued "a conceptually flawed theory."

A superbly stylish dresser in her pre-prison years, she walked out of the Pekin penitentiary in a gray sweatsuit and black trench coat, carrying a personal phone book as her only possession, and took a cab to a hotel in nearby Peoria.

She told Wagner at the time, "I never was in prison in my heart. Nobody can truly understand what it’s like to be the target. Imprisonment was not fun, but it was meaningful. There’s a purpose to everything in life. I’ve always wanted to work with women and children. I want to put my time and energy into something that has meaning. Everything in my life is gone. But I don’t live my life as an angry or bitter person."

Last week Susan Bala won another battle in court. The 8th circuit court of appeals again ruled in her favor, saying she was entitled to collect $110,218 in back rent owed her because Racing Services rented office space in the building she owned. The government appealed the decision, and Bala won again.

It was significant that this wronged woman was represented by a woman lawyer, in a week when Sonia Sotomayor was being put through the wringers by badgering white senators in Washington.

We’re not quite there yet on equality in this country, but we’re getting closer.

Question? Comment? E-mail me at: Stan Bergstein