ND taxpayers could owe Susan Bala millions of dollars for wrongful conviction
In the early 2000s, the state of ND wrongfully convicted Susan Bala and extracted an illegal tax from her business. Now North Dakota owes her over $13 million plus interest. Bala tells us its in the taxpayer's best interest for the state to determine when interest on the $13 million began accruing, as that money will come from North Dakota taxpayers.
(Please note - this transcript was copied from an electronic captioning service. We apologize for any errors, spelling, grammatical, or otherwise.)
Went to the legislature to tell them this is something that's out there. It's coming and it's time to prepare for it.
That is Susan Bala who was wrongfully convicted and spent nearly 18 months in a federal prison talking about how North Dakota legislatures were recently alerted that the North Dakota taxpayers owed millions of dollars because her racing services business was unlawfully taxed. For those of you turn not guilty to hear more about the shared parenting bill we've been promoting that, we'll have that segment for you later this week.
Good evening and welcome to "Point of View." I'm Chris Berg. Thank you for joining us. It's been decided the state will repay Susan Bala roughly 13-plus million dollars for taxes that were unlawfully extracted from her business, plus roughly $72,000 per month in interest. We don't know right now is how far back we'll be paying her that $72,000 month in interest. Could be two years. Could be more than ten years. We're going to find that out at a later date. Joining us in studio is Susan Bala. Thank you for being here.
You're welcome. Thank you for having me.
I wasn't in the state when this was going down. Can you bring us up to speed to what happened and where things are at today?
It was apparently a perfect storm. We had been building a company 2 for 15 years and been great partners with the state, built a wonderful partnership with horsemen of the state and built a company that went national and international. There was a story that got brought to the executive director of the North Dakota racing commission and unfortunately, instead of him taking it throughout process of the racing commission where it belonged. It was their jurisdiction, state jurisdiction, it got catapulted to the attorney general's office onto the U.S. attorney and an investigation got launched and a federal case got put together that ultimately did not stand. But it put the company on an incredible path and at the same time, the state was pressing for tax which is had never been legislatively authorized. So we had both of these forces pushing at the company and we were fighting to protect the company and to protect the industry we had built and to right what happened because something went very awry here. And I should point out that the $13.5 million that we're talk being with the state now we've arrived at the number based oven the number that was taken during those years it was not authorized, but that's actually the company's money. So for the taxpayers' sensitivities, it would be giving the company back its own money. It's the interest that is the park that the taxpayers need to actual low be concerned with and the legislature because that is continuing to accrue and that accrues at a large rate.
I spoke with Leader Carlson earlier today. He said we're going to go through the full appeal process and exacerbate all the appeals. We will not get this finished out this session. They're not going to put that in a line item this biennium, what do you say?
This has been a process all along and it's got to get exhausted. I think it's taken 14 years to get here, unfortunately. I can only say if it's to understand from a human point of view that it was your company that got crushed and it's your company and your assets that ended up getting succumbed to this process, that you might feel differently. But I really felt that we had to fight for what was right here and I think we did and I think we prevailed because we were right on the law and we were right on the facts. D fact that interest is accruing. I appreciate the legislature are going to say we want to exhaust all appellate processes to figure out when this interest is going to ultimately start to accrue. At the end of the day, it will continue to accrue until we can get this resolved and I think it will be better for everybody to get this behind everyone.
Let's back up for a moment. Attorney general at the time was Wayne Stenehjem. I reached out to Wrigley. We invited him on the show. He declined to come on tonight. He may be on later on this week. Here’s what I want to share with you. You mentioned somebody who went to the racing commissioner and that's how ultimate three went to the A.G. and the feds got involved. Mr. Wrigley said there was a whistle blower that tipped the F.B.I. about a billion you had in Fargo that had a $100 million in revenue flowing through it that was not being reported for tax returns. Is that true?
No. The mistake was he mistakenly thought that we were running a simulcast off-track betting location at a building in Fargo. It was our offices and this was being done under the new legislation which is called account wager. It was all done through technology. Through technology, you don't need a site. You don't need a location or simulcast location. So they were just mistakenly in the wrong world and the wrong activity entirely. It was a different law. It was different regulations. Those regulations had not been promulgated yet. We were not running a simulcast off-track betting location whatsoever. It was our offices. It was a terrible misguiding of the facts and unfortunately by the time we got all the way down the lane to figure -- so they could figure it out, all of this happened.
Were you reporting the $100 million in revenue?
The administrative programs that we were working with had gapped picking up certain -- it's not revenue. It's data. So we did not deal with money. We dealt with data. So that data --
What do you mean you weren't dealing with money?
We were transmitting wagering data and so --
You were still taking a piece of the action?
Eventually you get paid a commission for handling that transaction. But you're handling it electronically. So it's not that you're handling $100 million. You're handling a hundred million in wagering data.
So you reporting the commissions off this $100 million?
There was a period offed months where that particular set of -- data set did not get reported. But we self-reported it. We discovered it and we reported it to the state.
Interesting. The other thing is that you brought up your accountant and/or business partner, I couldn't tell if they were both or not -- pled guilty and testified against you. Thus saying hey there, is some teeth in this lawsuit.
And I think that's the unfortunate part of these things, when you're dealing with a federal system. It's a point system and very intimidating and people get very scared and in this particular case, it sounds a lot more sensational than it actually was. The fact of the matter is, he went through plea bargain. Two of my employees went through plea bargain. They were very frightened by this whole system. Their testimony ultimately amounted to nothing. They didn't have anything to testify really to. But the fact that you can say that, well, they plea bargained or pled guilty to something and then they testified, sounds bad. But when you really examine it and you say what did they testify to and what happened? Why would they plea, these are two frightened people that were facing not being with their children and facing a federal system where there is mandated sentencing. So why really blame them at that point in time at the end of the day they plea bargained so they didn't have to face ultimately what I faced.
You spoke to one of our reporters earlier today. You alluded to some things and I want to give you a chance to clarify some things.
I think there are lessons to be learned about when politics enter the picture. And you no longer dealing with the law. You're no longer dealing with business or common sense. And I think that's really the lesson that when politics get involved, things really get twisted.
Who are you alluding to specifically what politics are you talking about?