01/17/2005 12:00AM

Dakota OTB trial starting


A federal trial into allegations that Racing Services Inc., the defunct North Dakota rebate betting shop, ran an illegal gambling operation handling $100 million in bets was scheduled to begin Tuesday in Fargo. The trial is expected to last two weeks.

Susan Bala, who founded Racing Services, and Raymundo Diaz Jr., a vice president of the company, are facing 12 felony counts. The charges include running an illegal gambling operation, money laundering, illegal wire transmission, and conspiracy.

Bala, Diaz, Racing Services, and a related company, Global Content Inc., were indicted in December 2003, five months after the state of North Dakota seized the company's assets because of unpaid tax bills and questions about an alleged illegal gambling operation. Investigators say that the operation took in $99 million in bets from October 2002 to April 2003. The bets were not reported to the state, which allowed Racing Services to avoid paying any taxes on the wagers, according to the indictment.

Bala has pleaded not guilty. In previous interviews, Bala described the underreported handle as an "internal mistake."

Diaz initially pleaded not guilty as well. According to some reports, however, Diaz is expected to change his plea to guilty on several of the charges against him and provide testimony for the government.

Racing Services was also named in an indictment released last week that charged 17 people, including three alleged members of the Gambino organized crime family, with running an illegal gambling operation. The group made wagers through Racing Services when the company was still in operation, that indictment alleged. Racing Services was not charged with any crime in the indictment, and the trial opening Tuesday is not related to that case.