this pisses me off to no end. My neighbors do this, and they know their dog is aggressive and mean. He has attacked my dog, and yet they still walk him without a leash. One time I told them that they only had seconds to subdue their dog before our dogs spotted each other and a fight ensued (my dog, on a leash with me helplessly watching him be attacked) , but they continue to do it. It's the rudest, stupidest behavior. It's like thinking your own sh%t doesn't smell, so you refuse to flush. Sorry for the gross analogy, but it ticks me off.
Videotape this and send it to your local Animal Control/Police. Almost all municipalities anc states have laws against having dogs off-leash and the fines in the last few years have become considerable.