M.

A.

improve lifestyle and living location for personal, health, or professional
advancement. The program only covers actual moving expenses, though, such as
hiring movers or renting a moving van. Further, the maximum grant permitted
under the program is $2,500.

A grant of $19,800 to a tribal member, made outside the scope of a legitimate
Tribal government program, is not a permissible use of net gaming revenue.

The payment does not comply with any of the uses of net gaming revenue
permitted by IGRA, NIGC regulations, or the Tribe’s gaming ordinance and is an
improper use of net revenue.

The payment to Mr. Baxley constitutes a per capita payment made in addition to
that permitted by the Tribe’s RAP, and is therefore a violation of IGRA.

. Second Violation

On August 20, 2007, Seminole Tribe of Florida Accounts Payable Department
issued check number 231211 in the amount of $5,000 to Marty Johns.

The check was authorized by Chairman Mitchell Cypress in an August 20, 2007
memorandum to Teresa Colaluca, Accounts Payable for Representatives.

. According to the August memorandum, the $5,000 was “to be used towards a

property that is being leased by Mr. Johns together with a few other Tribal
members to be used for hunting and other recreational activities.”

. In the memorandum, Chairman Cypress ordered the money to be taken from the

Fitness Department’s budget.

The payment was accounted for in the Tribe’s General Ledger as Event
Sponsorship.

At the time of the payment, there was no Event Sponsorship program.

. The Tribe did not require and did not produce a copy of the property lease or any

other evidence that the money was used to lease property.

. The Tribe did not require Mr. Johns to repay the $5,000.

A grant of $5,000 to a tribal member, made outside the scope of a legitimate
Tribal government program, is not a permissible use of net gaming revenue.

The payment does not comply with any of the uses of net gaming revenue
permitted by IGRA, NIGC regulations, or the Tribe’s gaming ordinance and is an
improper use of the revenue.


11.

12%

G. Payment of the Mr. Osceola’s personal credit card expenses with Tribal net
gaming revenue constitutes a per capita payment made in addition to the Tribe’s
RAP and is therefore a violation of IGRA.

Measures Required to Correct these Violations

A. The Tribe shall review all Tribal Council credit card records from 2005 to the
present to determine whether charges are business or personal. Within 60 days
from the date of this NOV, the Tribe shall submit a report, including copies of
records to the NIGC, detailing the Tribe's findings and demonstrating that every
Tribal Council Member has repaid any personal expenses incurred on a Tribal
credit card.

B. The Tribe shall seek repayment of the $15,500 grant to Annie Jumper and, within
60 days of from the date of this NOV, submit to the NIGC a fully executed
repayment plan for Ms. Jumper to follow. The repayment schedule shall not last
more than 3 years.

C. The Tribe shall seek repayment of the $19,800 “relocation reimbursement”
provided to Carl Baxley and, within 60 days of from the date of this NOV, submit
to the NIGC a fully executed repayment plan for Mr. Baxley to follow. The
repayment schedule shall not last more than 3 years.

D. The Tribe shall seek repayment of the $5,000 provided to Marty Johns and, within
60 days from the date of this NOV, submit to the NIGC a fully executed
repayment plan for Mr. Johns to follow. The repayment schedule shall not last
more than 1 year.

E. The Tribe shall seek repayment of the $10,000 given to Francine Marie Osceola
for a Christmas gathering and, within 60 days from the date of this NOV, submit a
fully executed repayment plan for Ms. Osceola to follow. The repayment schedule
shall not last more than 2 years.

F. The Tribe shall seek the immediate repossession of the GMC Yukon XL given to
Raphael Sanchez. In the alternative, Mr. Sanchez may purchase the car from the
Tribe for the September 6, 2007 Kelly Blue Book value. All fully executed sales
documents shall be submitted to the NIGC within 60 days.

Appeal

Within 30 (thirty) days after service of this Notice of Violation, Respondent may
appeal to the full Commission under 25 C.F.R. Part 577 by submitting a notice of
appeal and, if desired, request in writing for a hearing to the National Indian Gaming
Commission, 1441 L Street, NW, Ninth Floor, Washington, DC 20005. Respondent
has a right to assistance of counsel in such an appeal. A notice of appeal must
reference this Notice of Violation.

10


The Vehicle Sale Procedure form, establishing the terms of the sale of the GMC
Yukon Denali, was signed by Suresh Geer, Director of Finance, per David
Cypress.

The Tribe does not have a program that addresses car sales, but each sale is made
according to a Vehicle Sale Procedure. The Vehicle Sale Procedure describes the
automobile and sets the bidding procedure and minimum price.

The Vehicle Sale Procedure for the GMC Yukon sold to Mr. Sanchez requires
that the Kelley Blue Book private party value shall be the beginning sales price
and the Kelley Blue Book trade in value shall be the lowest sales price.

The Vehicle Sale Procedure form asserts that the on September 6, 2007, the
“Book Value” of the car was $47,121.25. It is not specified if this is the Kelley
Blue Book private party value, trade in value, or a based on a different value
calculation.

The Tribe failed to follow its own procedures in selling the car to Mr. Sanchez for
less than the Kelley Blue Book trade in value.

NIGC investigators were told that traditionally, when an individual loses their
liaison position, they are allowed to keep their official government vehicle.

. The sale of the car to Mr. Sanchez at a substantially reduced rate was a fictitious

transaction to conceal the purchase of the car for Mr. Sanchez.

The purchase of a car for an individual member or Tribal employee is not a
permissible use of net revenues under IGRA, NIGC regulations, or the Tribe’s
gaming ordinance.

. The purchase of the car for Mr. Sanchez constitutes a per capita payment made in

addition to that permitted by the Tribe’s RAP and is therefore a violation of
IGRA.

Fifth Violation

A.

In a June 5, 2007 note to Tribal Council Member David Cypress, Tribal member
Annie Jumper requested $15,500 for “housing expenses.”

The note did not further describe what expenses were incurred or how the $15,500
was to be used. The NIGC investigative team requested any documents
supporting the expenses claimed by Ms. Jumper, but none were provided.

The request was forwarded to the Accounts Payable Department, who issued
check number 219130 in the amount of $15,500 to Ms. Jumper on June 7, 2007.


K. The payment to Mr. Johns constitutes a per capita payment made in addition to
that permitted by the Tribe’s RAP and is therefore a violation of IGRA.

. Third Violation

A. On June 11, 2007, the Tribe issued check number 219386 for $10,000 to Francine
Marie Osceola.

B. Ms. Osceola requested the money via an undated, hand-written note to Chairman
Mitchell Cypress.

C. According to the note, the money was requested from “money allotted for
memorial events” to pay for “a Christmas Gathering in Big Cypress” in December
of 2006, at which Ms. Osceola served dinner and distributed gifts.

D. The check was issued more than six months after the party was held, and no
receipts or invoices were provided to the Tribe to substantiate the costs.

E. The expense was accounted for in the Tribe’s General Ledger as a Community
Activity.

F. The payment was made outside the scope of a legitimate program.

G. Paying for an individual tribal member’s Christmas party does not comply with
any of the uses of net gaming revenue permitted by IGRA, NIGC regulations, or
the Tribe’s gaming ordinance and is an improper use of net revenue.

H. The payment to Ms. Osceola constitutes a per capita payment made in addition to
that permitted by the Tribe’s RAP and is therefore a violation of IGRA.

. Fourth Violation

A. On February 1, 2007, Immokalee Liaison Rafael Sanchez submitted Purchase
Order Requisition No. 122927 for a 2002 GMC Yukon Denali with a 5 year
warranty at a cost of $55,074.50.

B. On February 2, 2007, the requisition was approved by Tribal Council
Representative David Cypress.

C. Check No. 202410, in the amount of $55,074.50, was issued to Pines Pontiac
GMC Buick on February 5, 2007. The purchase of the vehicle was accounted for
on the Tribe’s General Ledger as Miscellaneous Expense.

D. On September 6, 2007, the Tribe sold the GMC Yukon XL to Mr. Sanchez for ten
dollars ($10.00). The Bill of Sale is signed by Pricilla D. Sayen, Secretary of
Seminole Tribe of Florida.


3. November 3, 2006: $136.75 purchase at the Palm Restaurant in Las Vegas,
Nevada.

4. November 14, 2006: $9,953.41 purchase at Americrown Service, an event
services company.

5. November 20, 2006: $5,077.16 purchase at Broward Motorsports, a
motorcycle dealer.

6. November 27, 2006: Two purchases for $616.90 and $1,327.47 at Portofino
Bay Resort, a hotel in Orlando, Florida.

7. November 30, 2006: $222.60 purchase at California Custom Sport Trucks, an
automobile accessories store in Fort Lauderdale, Florida.

8. December 5, 2006: $13,949 purchase at Platinum Jewelry Exchange.

9. December 5, 2006: $2,159.80 purchase at Sound Advice, an electronics store
in Hollywood, Florida.

10. December 6, 2006: $3,356.87 purchase from Protection One, a home security
company.

11. December 7, 2006: $551.20 purchase from Protection One.

12. December 9, 2006: Two purchases for $1,097.16 and $470.16 at Bruce
Rossmeyer’s Harley Davidson, a motorcycle dealer.

13. December 14, 2006: $30,500 purchase at Platinum Jewelry Exchange.

14. December 14, 2006: $1,272.84 purchase from Harley Davidson of Miami, a
motorcycle dealer.

The Tribe was unable to produce any documentation justifying the purchases as a
business expense and, during a September 9, 2009 meeting with the NIGC, Mr.
Osceola affirmed that the charges to the card were for personal expenses.

On February 17, 2010, the Tribe sent to the NIGC a list of “personal credit card
charges” made by Max Osceola. All of the charges listed above in part 10(c) are
on that list.

Payment of a Tribal member’s personal credit card expenses is not a permissible
use of net gaming revenue pursuant to IGRA, NIGC regulations, or the Tribe’s
gaming ordinance.


National Indian Gaming Commission

NOTICE OF VIOLATION

NOV-10-01

To: Mitchell Cypress, Chairman
Seminole Tribe of Florida
6300 Stirling Road
Hollywood, Florida 33024
Fax: (954) 967-3463

Alan Huff, Chairman
Seminole Gaming Commission
6300 Stirling Road
Hollywood, Florida 33024
Fax: (954) 967-3464

1. Notification of Violation

The Chairman of the National Indian Gaming Commission (NIGC) hereby gives
notice that the Seminole Tribe of Florida (Respondent or Tribe), headquartered in
Hollywood, Florida, is in violation of the Indian Gaming Regulatory Act (IGRA),
NIGC regulations, and its tribal gaming ordinance, because the Tribe used net gaming
revenue for purposes other than those permitted by IGRA, NIGC regulations, and the
Tribe’s gaming ordinance.

2. Authority

A. The Chairman of the NIGC (Chairman) may issue a Notice of Violation (NOV) to
any person for violation of any provision of the Indian Gaming Regulatory Act
(IGRA), NIGC regulations, or any provision of a tribal gaming ordinance or
resolution approved by the Chairman. 25 U.S.C. § 2713; 25 C.F.R. § 573.3.

B. The Chairman shall have authority to levy and collect appropriate civil fines, not
to exceed $ 25,000 per violation, against the tribal operator of an Indian game or a
management contractor engaged in gaming for any violation of any provision of
this Act, any regulation prescribed by the Commission pursuant to this Act, or
tribal regulations, ordinances, or resolutions approved under the Act. 25 U.S.C. §
2713(a)(1).

3. Applicable Federal and Tribal Laws



Certificate of Service

I certify that this Notice of Violation was sent by facsimile transmission and certified
US. mail, return receipt requested, on June_<4_, 2010, to:

Seminole Tribe of Florida

Attn: Mitchell Cypress, Chairman
6300 Stirling Road

Hollywood, FL 33024

FAX: (954) 967-3463

Seminole Gaming Commission
Attn: Alan Huff, Chairman
6300 Stirling Road
Hollywood, FL 33024

FAX: (954) 967-3464

Jim Shore, General Counsel
Seminole Tribe of Florida
6300 Stirling Road
Hollywood, FL 33024
FAX: (954) 967-3950

|
\ \ \ ay |
Wo bop
Michael Hoenig
Staff Attorney, NIGC ~——

7


Within ten (10) days after filing a notice of appeal, Respondent must file with the
Commission a supplemental statement that states with particularity the relief desired
and the grounds therefore and that includes, when available, supporting evidence in
the form of affidavits. If Respondent wishes to present oral testimony or witnesses at
the hearing, Respondent must include a request to do so with the supplemental
statement. The request to present oral testimony or witnesses must specify the names
of proposed witnesses and the general nature of their expected testimony, whether a
closed hearing is requested and why. Respondent may, in writing, waive its right to
an oral hearing and instead elect to have the matter determined by the Commission
solely on the basis of written submissions.

13. Fine and Submission of Information

The violations cited above may result in the assessment of a civil fine against
Respondent in an amount not to exceed $25,000 per violation per day. Under 25
C.F.R. § 575.5(a), Respondent may submit written information about the violation to
the Chairman within fifteen (15) days after service of this notice of violation (or such
longer period as the Chairman of the Commission may grant for good cause). The
Chairman shall consider any information submitted in determining the facts
surrounding the violation and the amount of the civil fine, if any.

14. Temporary Closure Order Information

The violations cited above may result in a temporary closure order if the Tribe fails to
correct the violations in the time permitted in this Notice of Violation. Under 25
U.S.C. § 2713(b)(2), not later than 30 days after the order of temporary closure, the
tribe may request a hearing before the Commission to determine whether such order
should be made permanent or dissolved. Under 25 C.F.R. § 573.6, within seven days
of the issuance of a temporary closure order, the tribe may request informal expedited
review by the Chairman.

ok

Dated this 37 of Juss 2010

11


10.

The Payment was accounted for as a Relocation Expense on the Tribe’s General
Ledger but there is no evidence that the request was made for “relocation
expenses” or that the money was used for any of the eligible services
encompassed by the Relocation Assistance Program.

. The Seminole Tribe of Florida Relocation Assistance Program is designed to

provide Tribal member with assistance in costs associated with relocation to
improve lifestyle and living location for personal, health, or professional
advancement. The program only covers actual moving expenses, though, such as
hiring movers or renting a moving van.

The Tribe’s Relocation Assistance Program permits grants for moving services up
to a cost of $2,500. The grant to Ms. Jumper greatly exceeds that amount.

. The Tribe’s Relocation Assistance Program at the time of the grant to Ms. Jumper

permits the Tribal Council to make exceptions to the grant amount, but the Tribe
was not able to produce any documents demonstrating that the Tribal Council
considered the request.

. The Relocation Assistance Program does not permit the Tribal Council to grant

money for services not covered by the program.

An unsubstantiated $15,500 distribution to an individual Tribal member is not a
permissible use of net gaming revenue pursuant to IGRA, NIGC regulations, or
the Tribe’s gaming ordinance.

The payment to Ms. Jumper constitutes a per capita payment made in addition to
that permitted by the Tribe’s RAP and is therefore a violation of IGRA.

Sixth Violation

A.

The Seminole Tribe of Florida issued an American Express card to Tribal Council
member Max B. Osceola, Jr.

The card balance is paid by the Tribe with net gaming revenues through the “Gov
Fund.”

The American Express card, which is paid for by the Tribe, was used by Mr.
Osceola to make several personal purchases, including:

1. October 27, 2006: $13,184 purchase at Platinum Jewelry Exchange, a jewelry
store in Hollywood Florida.

2. November 1, 2006: $1,636 purchase at Pure Triumph Fort Lauderdale, a
motorcycle dealer.


In other instances, the tribe simply decided to give cash or valuable goods to a tribal
member with complete disregard for IGRA’s net revenue requirements. Regardless of
how the disbursements were made or labeled, though, they are per capita payments
made outside the scope of the RAP and are a violation of IGRA.

. First Violation

A. On August 10, 2007, the Tribe issued check no. 229018 to Tribal member Carl
Baxley for $19,800.00. The check request was made by the Business Manager of
the Tribe’s Housing Department and the funds were accounted for on the General
Ledger as Home Owner Assistance.

B. An August 6, 2007 e-mail from the Director of the Tribe’s Housing Department to
the Department’s Housing Services Manager indicates that Mr. Baxley requested
the money for “relocation reimbursement.”

C. In an August 8, 2007 memorandum from the Business Manager of the Tribal
Housing Department to Accounts Payable, the Business Manager disclosed that
Mr. Baxley was unable to stay at his primary residence because it was being

replaced as part of the Tribe’s “project board for replacement home.”

D. The August 6, 2007 email also reveals, though, that while Mr. Baxley was unable
to stay at his primary place of residence, he stayed in another one of his homes.

E. According to the August 6, 2007 e-mail, Mr Baxley requested the money because
“it is only fair since others receive such assistance.”

F. The August 6, 2007 e-mail also reveals that the grant amount was proposed by
Mr. Baxley, rather than based on any written guidelines or procedures established
by the Department of Housing, and was “calculated at $1,100 per month, which is
what his mortgage used to be on the unit.”

G. The Tribe did not require Mr. Baxley to repay the $19,800.

H. While the Tribe had a Relocation Assistance Program and an Emergency Rental
Assistance Program in place at the time of the payment, those programs do not
provide for this type of payment.

I. The Seminole Tribe of Florida Emergency Rental Assistance Program is designed
to provide Tribal members with assistance to secure adequate housing that is
essential as the result of emergency circumstances, education, employment or
health-related issues or eviction related situations. There was no such emergency
here. Even if there were, the maximum grant permitted under the program is
$3,000.

J. The Seminole Tribe of Florida Relocation Assistance Program is designed to
provide Tribal members with assistance in costs associated with relocation to


When tribes establish government programs to benefit individual members, those
programs should: 1) be created in response to a recognized need within the tribal
community; 2) have written eligibility criteria to determine which members qualify to
participate in the program; and 3) not discriminate by including some members and
excluding others without reasonable justification. Payments made and services
offered should be made equally available to all those who meet program standards.
Id.

Although direct distributions of net revenue to tribal members do not typically fall
into any of the five permitted uses, per capita payments are permitted by IGRA.
Section 2710(b)(3) of IGRA states that net gaming revenue may be used to make per
capita payments to tribal members only if the tribe has adopted a revenue allocation
plan (RAP) approved by the Secretary of the Interior. The RAP is designed to protect
IGRA’s policy of promoting tribal economic development, self sufficiency, and
government by ensuring that any per capita payment leaves a significant share of net
gaming revenues for economic development and governmental purposes. See 25
U.S.C. 2710(b)(3)(B) (requires that “the [Revenue Allocation] plan is approved by
the Secretary as adequate, particularly with respect to uses described in clause (i) or
(iii) of [25 U.S.C. 2710(b)(2)(B)). It also ensures that per capita payments are made
equally to all tribal members or a particular group of members. See 25 C.F.R. part
290 (defining per capita payment as “the distribution of money or other thing of value
to all members of the tribe, or to identified groups of members ....”).

Per capita payments made to individual tribal members on an ad-hoc basis, outside
the scope of a RAP, or payments to individual members not made pursuant to a
government program divert money from the tribe as a whole and thereby frustrate
IGRA’s policy of ensuring that the entire tribe benefit from tribal gaming, rather than
individual tribal members. More to the point here, though, such payments are an
impermissible use of net revenue and a violation of IGRA.

The Seminole Tribe of Florida’s RAP was approved by the Department of the Interior
on August 25, 2005. As required by IGRA, the Tribe’s RAP specifies the percentage
of net revenue to be used for per capita payments and reserves the rest for
government operations, general welfare, and economic development. Seminole RAP
§ 4. While the tribe makes authorized per capita payments pursuant to the RAP, it has
also made several per capita payments outside the scope of the RAP and, therefore, in
violation of IGRA.

As described below, these additional per capita payments were made under the
pretense of delivering services pursuant to a tribal program or, in some cases, without
any pretense at all. Many of the “programs” used to justify the distributions had no
written criteria or guiding procedures and, as a consequence, are not bona-fide
programs. For example, the Tribe engages in event sponsorship via a “program” with
no written criteria and on an impromptu basis, choosing to sponsor events without
any discernible standard and without requiring any proof that the event actually took
place.


25 U.S.C. § 2710(b)(2)(B); 25 C.F.R. § 522.4(b)(2); Section 1-1.09(a) of the
Seminole Tribal Gaming Code (Code) — Net revenues from any tribal gaming are
not to be used for purposes other than (1) to fund tribal government operations
and programs; (2) to provide for the general welfare of the Indian tribe and its
members; (3) to promote the tribal economic development; (4) to donate to
charitable organizations; (5) to help fund operations of local government
agencies.

25 U.S.C. § 2710(b)(3); 25 C.F.R. § 290.6 — Net revenues from gaming activities
conducted or licensed by any Indian tribe may be used to make per capita
payments to members of the Indian tribe only if the tribe has prepared a plan to
allocate revenues to the five permitted uses found in 25 U.S.C. § 2710(b)(2)(B).
That plan must be approved by the Secretary of the Interior as adequate,
particularly with respect to the uses described in clause (i) or (iii) of

§ 2710(b)(2)(B).

Section 1 of the Seminole Tribe Revenue Allocation & Per Capita Distribution
Plan (Seminole RAP) — The Tribal Council of the Seminole Tribe of Florida
adopted the RAP to govern the allocation of its net gaming revenues for per capita
distribution payments and governmental programs consistent with the
requirements of IGRA and the purposes of the Seminole Tribe of Florida.

Section 6(a) of the Seminole RAP- In order to provide for the health, education
and welfare of Qualified Enrolled Tribal Members, the portion of the net gaming
revenues allocated to per capita distribution payments shall be paid in equal
shares to all Qualified Enrolled Tribal members . . ..

. Circumstances

The purpose of IGRA is, in part, to provide a statutory basis for the operation of
gaming by tribes as a means to promote tribal economic development, self
sufficiency, and strong tribal governments. It is also to ensure that Indian tribes as a
whole are the primary beneficiary of gaming revenue. To achieve that purpose, IGRA
permits a Tribe to use its net gaming revenue for the five purposes listed above in
paragraph 3(A). Tribes typically allocate a substantial portion of their gaming
revenues to the “general welfare” of the tribe and its members; to “tribal economic
development”; and/or to “government operations or programs.”

Government programs are set up to serve one or more needs or requirements of the
tribal community. A fundamental part of any government program is the criteria
established to determine which tribal members are eligible to participate in a
program. The criteria are tied to the needs and requirements of the tribal
membership, and are often tied to income levels and the financial needs of a group of
members. Criteria can be based on needs other than financial ones, however, such as
educational, medical, or housing needs. See NIGC Bulletin No. 05-01.