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The rulings by U.S. District Judge Ralph Erickson mean the records of the top three officials of the now-defunct Racing Services Inc. will be cleared. Authorities had called it the largest illegal gambling case in North Dakota.
Erickson ruled on the convictions of Raymondo Diaz Jr., the former RSI vice president, and Gary Storm, the company’s chief financial officer, at the request of attorneys on both sides.
U.S. Attorney Drew Wrigley said federal prosecutors felt it was the right thing to do. Defense attorneys said the rulings provide justice for their clients, and will help them get back their lives and careers.
“It appears a fundamental error has occurred, and compelling circumstances exist warranting an extraordinary remedy to achieve substantial justice,” Erickson wrote in reversing the convictions of both men.
Diaz pleaded guilty to three counts of illegal gambling in the case. He was ordered in 2005 to serve 90 days in a Fargo halfway house, 60 days of electronic home monitoring and two years of probation.
Storm pleaded guilty to one count and was sentenced in 2005 to two years of probation. Both men also were ordered to perform 100 hours of community service.
Erickson reversed Storm’s conviction in May and Diaz’s conviction this week. His identical rulings have the same effect as if the two men had won appeals. Their guilty pleas are wiped from their records and they regain their civil rights, including the right to vote and own a gun.
His decisions come in the wake of a March 2007 ruling by the 8th U.S. Circuit Court of Appeals that reversed the conviction of RSI founder Susan Bala and freed her from a minimum-security prison in Illinois. The appeals judges cited insufficient evidence.
Bala had been convicted by a jury in 2005 of 12 felonies involving charges of running an illegal gambling business and sentenced to more than two years in prison. She and RSI were ordered to forfeit more than $99 million. The forfeiture also was reversed by the appeals court.
Joseph Friedberg, the attorney for Diaz, and Robert Hoy, the attorney for Storm, credited the willingness of federal prosecutors to approach the judge about conviction reversals.
“It can sometimes get lost in the ... competitive battle between prosecuting and defending in criminal cases that the real goal here is justice, and that essentially is what has been done here,” Hoy said.
Wrigley, who disagrees with the 8th Circuit ruling in Bala’s case, said none of the defendants denied that an unlicensed wagering site in Fargo took in bets. He said Diaz and Storm had pleaded guilty and the appeals court ruling in Bala’s case did not mention them.
“We didn’t have any obligation to do anything with respect to them,” Wrigley said. However, he said, “in light of the 8th Circuit opinion ... we’ve done what we felt was the just thing.
“We’re able to sleep around here at night because we take our obligation to justice so seriously,” he said.
Hoy said Storm, who is a certified public accountant in Minnesota, did not lose his professional license because of his conviction but having his record cleared should help his career.
Friedberg said Diaz is living in El Paso, Texas, and working as a consultant to a Mexico-based gambling operation. He said the conviction reversal should help Diaz become licensed to work in the gambling industry in the United States. He does not need a license to work as a consultant.
