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By Dave Kolpack, Associated Press Writer, Published December 01 2009

Judge dismisses Bala's lawsuit

A federal judge has thrown out a lawsuit by the former owner of a Fargo simulcast horse racing company who accused state and federal prosecutors and others of fabricating evidence.

Susan Bala’s conviction for illegal gambling was overturned when an appeals court said federal prosecutors failed to interpret state law correctly. Bala claimed that her constitutional rights were violated when she was indicted and later prosecuted.

U.S. District Judge Daniel Hovland ruled Monday that Bala failed to state a valid claim against Attorney General Wayne Stenehjem, former U.S. Attorney Drew Wrigley, former state Racing Commission leaders Paul Bowlinger and Howard Wrigley, and former RSI employee Michael Cichy.

“It completely refutes every claim against every party that she named in her frivolous lawsuit,” Drew Wrigley said. “They got precisely what their lawsuit warranted: It got thrown out.”

Bruce Schoenwald, Bala’s lawyer, said Monday that he hadn’t seen the 63-page order but likely would appeal.

“How can they take over all your property and put you in jail for no reason and there’s no remedy for it?” Schoenwald said.

Bala, the founder of Racing Services Inc., 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.

U.S. District Judge Ralph Erickson, who presided over the trial, refused to issue Bala 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.

Bala claimed the conspiracy started when Cichy made a false report about an illegal gambling site and the other defendants “ran with it.” There’s no evidence to back up that claim, Hovland said.

“The court finds that the plaintiffs rely on mere speculation to support the allegation that a conspiracy existed between Cichy and the other defendants to ruin the gambling success of RSI,” Hovland said in Monday’s order.

Cichy’s lawyer, Sarah Andrews Herman, said Hovland’s ruling points out that Bala admitted to the 8th U.S. Circuit Court of Appeals that the alleged illegal site “at worst” violated the racing commission’s licensing regulations.

“That’s what my client reported them for,” Herman said. “It’s very frustrating for me that he had to pay to defend himself for that.”