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Dave Kolpack, Associated Press Writer, Published November 14 2009

Former RSI owner Bala says evidence fabricated

The attorney for the former owner of a Fargo simulcast horse racing company whose conviction for illegal gambling was overturned says prosecutors built their case on fabricated evidence and she deserves to be heard in court.

Susan Bala, who used to own Racing Services Inc., is suing Attorney General Wayne Stenehjem, former U.S. Attorney Drew Wrigley, former state Racing Commission leaders Paul Bowlinger and Howard Wrigley, and former racing Services Inc. employee Michael Cichy, alleging they violated her constitutional rights. The five men say the case should be thrown out.

Bala was convicted in 2005 and sentenced to serve 27 months in prison in what prosecutors said was the state’s largest illegal gambling case. A federal appeals court overturned the verdict, and Bala was released from custody after serving about 17 months.

Bala’s attorney, Bruce Schoenwald, argued at a court hearing Friday that his client was the victim of a conspiracy that started when Cichy told Bowlinger that Bala was running an illegal gambling site. Schoenwald said the site was for out-of-state bettors, and was not under the same regulations as the in-state simulcast betting parlors.

The other defendants “ran with it” even though they knew the site was legitimate and Cichy’s report was false, Schoenwald said.

“This fabricated evidence resulted in an indictment and conviction,” Schoenwald said.

Defense attorneys told U.S. District Judge Daniel Hovland that Bala’s complaint revolves around a legal interpretation and that their clients are protected from her lawsuit. Assistant Attorney General Douglas Bahr, representing Stenehjem, Bowlinger and Howard Wrigley, said Schoenwald has no legal basis to sue his clients.

“We keep hearing, ‘Oh, there’s some conspiracy,’ ” Bahr said. “That’s not the standard for this court.”

Federal prosecutor Shon Hastings, representing Drew Wrigley, who is Howard Wrigley’s son, said her client had no reason to promote a conspiracy.

“What possible motive could he have to take her down? It makes no sense,” Hastings said.

Sarah Andrews Herman, the lawyer for Cichy, said he had an obligation to report the alleged wrongdoing.

“That’s something we encourage in this country, and it’s something that good citizens are supposed to do,” Herman said.

The 8th U.S. Circuit Court of Appeals overturned the verdict against Bala in 2007, saying prosecutors did not interpret state law correctly. But U.S. District Judge Ralph Erickson refused to issue her a so-called certificate of innocence, a procedural step in suing the government. The 8th Circuit upheld Erickson’s ruling, saying its decision to overturn her conviction was not based on her innocence.

Schoenwald said the trial “morphed into a different animal” that focused on money for charities rather than licensing.

“There are a lot of issues that are still bubbling,” Schoenwald said. “She needs to have her day in court.”


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