02/04/2005 12:00AM

Bala guilty on all counts

Email

Susan Bala, the founder of Racing Services Inc. in North Dakota, was found guilty on Friday of running an illegal gambling operation, the Associated Press reported.

Bala and Racing Services were convicted on all 12 counts brought by prosecutors, which included charges of conducting an illegal gambling business, conspiracy, money laundering, and illegal wire transfer.

The trial, which began Jan. 18, was being closely watched by the racing industry because of its potential implications on account wagering on rebate operations. Racing Services was also mentioned in a federal indictment released earlier this year in which more than a dozen individuals, including three alleged members of the Gambino organized crime family, were charged with running an illegal gambling operation through four rebate shops, including Racing Services.

Prosecutors alleged that Racing Services took in $99 million in wagers during an eight-month period in 2002-2003 through an illegal live betting site in Fargo, did not properly report the wagers to the state, and was not connected to a North Dakota charity, in accordance with state law.

Bala testified for two days this week to refute testimony from former employees that she was aware of live bets being taken in Fargo. Bala's defense attorney, Mark Beauchene, attempted to portray Bala as being aware that the Fargo site was used for Internet wagers only.

Bala testified that she believed the operation was taking Internet wagers through a site in Costa Rica. Because the Costa Rica site was offshore, Bala said she believed, the wagers would not have to be reported to the state.

Bala's former boyfriend and a former vice president of Racing Services, Raymundo Diaz, testified against Bala after reaching an agreement with prosecutors to plead guilty to three counts. Several other former employees testified that they told Bala about the Fargo site's problems and how it operated.

Racing Services was one of the fastest-growing racing operations in the country over the past decade until it was seized by state regulators in late 2003. The company thrived by recruiting high-rolling bettors with rebates on handle.