If you were around the Fargo business scene in the late nineties, you knew the name Susan Bala. She wasn't just another entrepreneur; she was the architect of an entire industry. Her company, Racing Services, Inc. (RSI), basically built the framework for modern parimutuel horse racing in North Dakota. We’re talking about a woman who turned a relatively small investment into a business processing $500 million in betting volume.
Then it all came crashing down.
Federal agents, indictments, a prison sentence, and a $99 million forfeiture order. It looked like the end of a legacy. But the story of Susan Bala and TMM Inc is actually one of the most wild "comeback" tales in American legal history. It’s a story about a conviction that didn't stick and a government that eventually had to pay back millions.
The Rise of Racing Services, Inc.
Before there was TMM Inc, there was RSI. Susan Bala was a pioneer. Honestly, she didn't just play by the rules; she helped write them. In the late 80s and early 90s, she worked with the North Dakota Legislature to draft the very laws that allowed for interstate off-track parimutuel wagering.
She saw the future of gambling before most people did.
By the year 2000, RSI was the engine of the state's horse racing industry. It wasn't just about local bets. Bala built an international technology network that linked North Dakota to the rest of the world. It was a massive success, generating over $22 million in tax revenue for the state.
But when that much money is moving through a system, people start looking for reasons to take a cut—or find a fault.
The 2005 Conviction: A Life Derailed
In 2003, the federal government came knocking. They hit Bala and RSI with a 12-count indictment. The charges? Illegal gambling, money laundering, and conspiracy.
The government’s theory was basically that Bala had bypassed state laws by failing to pay certain fees to charities and the state. They alleged that her "account wagering" system—where people could call in or use the internet to place bets—was an illegal gambling business under the Wire Act.
The trial was a disaster for Bala.
- She was sentenced to 27 months in federal prison.
- The court ordered a staggering $99 million forfeiture.
- Her business was forced into bankruptcy.
She actually served about 18 months in a minimum-security prison camp in Illinois. Most people would have just disappeared after that. You've lost your company, your money, and your freedom. What else is there?
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Why the Susan Bala Conviction Was Overturned
Here is where the story takes a sharp turn. In March 2007, the 8th U.S. Circuit Court of Appeals did something rare: they completely wiped the slate clean.
They didn't just "reduce" her sentence. They overturned every single conviction.
The judges were pretty blunt about it, too. They ruled that the government had basically "railroaded" her using a flawed interpretation of state law. The court noted that the North Dakota Racing Commission’s rules were so vague that it was impossible to prove Bala had criminal intent.
"The result was a trial at which the government failed to prove any of the offenses charged," the ruling stated.
Imagine that. You spend a year and a half in a cell only for a higher court to say, "Yeah, the government didn't actually have a case."
The Pivot to TMM Inc
After her exoneration, Bala didn't just sit around. She shifted her focus to technology and intellectual property. This brings us to TMM Inc (TMMI), where she currently serves as President and CEO.
TMM Inc isn't a gambling company. It's a digital media technology firm. They focus on high-fidelity video compression and playback. Specifically, they’ve developed something called TRUDEF, a fractal video codec designed for 4K and 8K video.
It’s a complete 180 from the world of horse racing, yet it relies on the same visionary approach to technology that she used in the 90s.
As of early 2026, TMM Inc is active in the "Custom Computer Programming Services" sector. They’ve been working on a range of products, from the TMMI TRUDEF Video Player to small form factor computers like the TMMI Mini PC X. They’ve even been recruiting heavy hitters from the entertainment world, like former MGM Grand executives, to help scale their video tech.
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The $15 Million Settlement
Even though her name was cleared in 2007, the financial battle lasted another 14 years. It was a grueling trek through bankruptcy courts and state legislatures.
The main issue? The state of North Dakota had collected millions in taxes from RSI that the courts eventually ruled were illegal.
In 2017, the North Dakota Senate finally approved a settlement. They paid back roughly $15.2 million to the bankruptcy estate and Bala. It wasn't just about the money; it was a formal acknowledgement that the state had overstepped.
It's kinda wild when you think about it. The same state that helped put her in prison ended up writing her a check for eight figures.
What Most People Get Wrong About the Case
There are still a lot of misconceptions floating around about this case. You’ll often hear people say she "got off on a technicality." That’s just not true.
The 8th Circuit was very clear: there was insufficient evidence. That’s legal speak for "the crime didn't happen the way the prosecutors said it did."
Another common mistake is thinking TMM Inc is just a renamed version of her old racing company. It's a totally different beast. While RSI was a service provider for the betting industry, TMM Inc is a software and hardware developer.
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Actionable Insights from the Susan Bala Saga
If you're an entrepreneur or just someone following the intersection of business and law, there are some real-world takeaways here:
- Regulatory Vagueness is a Landmine: If you operate in a "highly regulated" industry (like gaming, crypto, or AI), vague laws aren't just annoying; they're dangerous. The government can interpret silence as a violation.
- Asset Protection Matters Early: During the heat of the legal battle, the government seized almost everything Bala owned, including her home. Having a clear separation between personal assets and business liabilities is vital before trouble starts.
- The Value of IP: Bala’s transition to TMM Inc shows that intellectual property—like the TRUDEF codec—is often the only thing that survives a corporate collapse. It gave her a platform to rebuild when the physical business of RSI was gone.
- The "Certificate of Innocence" Hurdle: Even after a conviction is overturned, getting a "Certificate of Innocence" (which allows you to sue for wrongful imprisonment) is incredibly difficult. Bala fought for years to get one and was repeatedly denied, showing that "not guilty" isn't always the same as "innocent" in the eyes of the civil court system.
The saga of Susan Bala and TMM Inc is a reminder that the legal system is slow, expensive, and sometimes flat-out wrong. But it's also a testament to what happens when someone refuses to stop fighting. Whether you're looking at her as a cautionary tale or a success story, she remains one of the most influential figures in the history of North Dakota business.
Next Steps for Researching Business Resilience:
- Review the 8th Circuit Court of Appeals ruling (United States v. Bala, 489 F. 3d 334) for a masterclass in how federal gambling laws are applied.
- Monitor TMM Inc (TMMI) filings on OTC Markets to see how their fractal video technology is being integrated into modern 8K streaming standards.
- Study the North Dakota Legislative records from 2017 regarding the settlement to understand the precedent set for state-collected excise taxes.