03/20/2007 12:00AM

Dark chapter comes to a close


TUCSON, Ariz. - Susan Bala is writing a book, and it will sell, to racing enthusiasts, to TV, and possibly to the silver screen as well.

You remember Susan. She is not easy to forget - a striking brunette, impeccably dressed, and extraordinarily smart. A few years ago she ran the biggest rebate operation in America, from the most unlikely spot: Fargo, North Dakota.

She has not been around lately at the racing meetings and conferences she used to attend regularly. For the last 18 months she has been counseling and teaching business and law to fellow inmates at the U.S. penitentiary in Pekin, Ill., sent there by federal prosecutors who charged her with running a huge illegal gambling operation. A jury believed them and a judge sentenced her to 27 months in prison.

Two weeks ago, a little late for Susan, a three-man U.S. appeals court said the prosecutors had failed to prove the charges and had pursued a "conceptually flawed theory." It set Susan Bala free.

Susan always had big ideas, and knew how to bring them off. After a couple of years at North Dakota State, she opened a ladies' specialty shop and jewelry store in downtown Fargo, and ultimately helped form a limited partnership, which allegedly sold shares at $49,500 a throw to 21 Fargo doctors. A year later, 13 of them sued, claiming the partners had paid themselves big salaries and run the business into bankruptcy. They won a $400,000 judgment against one of Susan's partners, 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 - pieced together Susan's fascinating story. She took two years off to nurse her mother, who was dying of cancer, then tackled the problems of a troubled company called Palace Supply, known locally as Jackpot, which supplied pull-tab tickets to North Dakota's legal charities.

Jackpot failed, but Susan was convinced that gambling could be profitable, if run right. She found some investors and tried unsuccessfully to open a racetrack, difficult to do in an area without people. Along the way Susan Bala figured out that simulcasting was the future. It had been legalized in North Dakota in 1989, and Susan and some investors, including, briefly, Dee Hubbard of Hollywood Park and Ruidoso Downs fame, formed Dakota Race Management.

The partners drifted away, and Susan wound up sole owner, renaming the business Racing Services Inc. She acquired a partner who, federal prosecutors claimed, shared a stylish home with Susan. He developed a subsidiary of Racing Services in his native Mexico, and testified against her at their trial.

The original charges were state offenses - dodging payments to charities - but the state turned the matter over to the feds. The government claimed Racing Services handled $99 million in illegal gambling, and held Susan personally responsible for $19.7 million. She was convicted on 12 counts.

How could an operation in remote, snowy Fargo bet such huge sums of money? Rebates. Racing Services attracted some of the biggest bettors in America, and they wagered millions. The Thoroughbred Racing Protective Bureau visited the site, and found it an impressive operation. Government prosecutors thought otherwise.

In prison, Susan Bala studied religions and began drawing and painting "as an expression of what was going on inside of me." Two weeks ago she was making a cup of instant oatmeal when she was paged to report to the prison office. Fargo Forum reporter Steven Wagner, who told the fascinating details of her release, said Susan saw a prison psychologist through a window and feared something had happened to a family member. Instead, she was told she was free.

"I never was in prison in my heart," Bala, 52, told Wagner. 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. She took a cab to a hotel in nearby Peoria, and told Wagner, "Nobody can truly understand what it's like to be the target." She called her imprisonment "not fun, but meaningful."

"There's a purpose to everything in life," she said. "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."

If you like her story, you'll love the book. Knowing Susan, she'll get it done.