NOTICE OF VIOLATION AND ORDER OF TEMPORARY CLOSURE 

Ref No. : NOV-CO-99-01 

JAN 6 1949 

VIA FACSIMJLE SERVICE PURSUANT TO 25 CFR 6 5 19.3!5) 

COPY TO FOLLOW BY CERTlFlED MAIL 

To: Henry Kostzuta, Chairman 

Apache Tribe of Oklahoma 

P.O. Box 1220 

Anadarko, Oklahoma 73005, 

Respondent 

Houston Klinekole, Acting Gaming Commissioner 

'1 ~b Agent for Service of Process 

Apache Tribe of Oklahoma 

P.O. Box 1220 

Anadarko, Oklahoma 73005 

Martin Bitseedy, Chairman, Apache Development Authority 

Alternate Agent for Service of Process 

Apache Tribe of Oklahoma 

P.O. Box 1220 

Anadarko, Oklahoma 73 005 

1. Under the authority of 25 U.S.C. $2701 m. and 25 CFR Part 573, the Chairman of 

the National Indian Gaming Commission (MGC) hereby gives notice that the Na-I-Sha 

gaming facility located on Indian lands in Anadarko, Oklahoma is ordered to close by 

12:00 p.m., Central Standard Time, January 7, 1999. This action is necessary due to 

violations of 25 C.F.R. §573.6(a)(l)(i) and 25 C.F.R. 5 573.6(a)(11) of the regulations of 

the MGC as further described below. 

2. Pursuant to NIGC regulations, it is a substantial violation to: fail to correct violations 

within the time permitted in a notice of violation, 25 C.F.R. 5 573.6(a)(l)(i); and to 

1-3' operate class I11 games in the absence of a tribal-state compact, 25 C.F.R. 

5 573.6(a)(11). 
L 8' 3. The Chainnan hereby gives notice that the Apache Tribe of Oklahoma ("Respondent"), 

located in Anadarko, Oklahoma, has committed substantial violations as follows: 

4. FAILURE TO CORRECT VIOLATION WITHIN TIME PERMITTED 

IN NOTICE OF VIOLATION 

a. The IGRA states that a tribe may engage in gaming if, among other requirements, 

the tribe submits to the MGC an annual independent audit report of the gaming 

operation. 25 U.S.C. $ 2710@)(2)(C) and (d)(2). NIGC regulations require that 

a tribe cause to be conducted annual independent audits of each gaming operation 

and submit the results of these audits to the NIGC. 25 C.F.R. $ 571.12. Tribes 

are to submit a copy of the report(s) and management letter(s) setting forth the 

results of each annual audit to the NIGC within 120 days after the end of each 

fiscal year of the gaming operation. 25 C.F.R. § 571.13. 

b. The Tribe has been operating Na-I-Sha Bingo since 1993. The fiscal year end for 

Na-I-Sha Bingo is December 3 1. The Tribe's fiscal year 1997 audit report was 

due to the NIGC no later than April 30, 1998. The NIGC did not receive the 

audit report. 

5. The history of this violation is as follows: 

a. The Respondent failed to submit audit reports for fiscal years 1993, 1994, 1995, 

and 1996. 

b. On March 3, 1997, the Respondent and the MGC entered into a Memorandum of 

Understanding ("MOU") extending the due date for the submission of all audit 

reports 160 days to August 10, 1997. The Respondent failed to comply with the 

MOU. 

c. On October 30, 1997, the Chairman issued a NOV against the Respondent for 

failure to submit audit reports for fiscal years 1993, 1994, 1995, and 1996. 

The Respondent did not appeal the NOV, and it became a final order of the 

Commission. 

d. On December 1, 1997, the Chairman issued a Notice of Proposed Civil Fine 

Assessment pursuant to 25 C.F.R. $ 575 in the amount of $40,000 (Forty 

Thousand Dollars). In arriving at this amount the Chairman considered that the 

Respondent had failed to have its gaming operation audited and to submit audit 

reports to the NIGC for the entire time it had operated gaming. The Chairman 

also considered that the Respondent had failed to honor the MOU it entered into 

with the MGC. 

e. On January 23, 1998, the Respondent and the MGC reached a Settlement 

Agreement regarding the Proposed Civil Fine. The Respondent agreed to submit 
all hre audit reports in compliance with NlGC regulations. The MGC agreed to 

accept audited general purpose financial statements in lieu of the audit reports, and 

the Respondent agreed to submit those audited statements by March 2, 1998. On 

April 20, 1998, the NIGC received several documents purporting to be audited 

general purpose financial statements from the Respondent. These documents were 

not audited general purpose financial statements. 

f The Respondent fkrther agreed to a civil fine in the amount of $16,000 (Sixteen 

Thousand Dollars), with $1,000 (One Thousand Dollars) payable under an agreed 

upon schedule, and the remaining $15,000 (Fieen Thousand Dollars) stayed 

contingent upon fkture compliance. If the Respondent failed to timely submit its 

fiscal year 1997 audit report, it was required to pay $5,000 (Five Thousand 

Dollars) to the NlGC within 20 business days following the due date for 

submission of the audit report. The same agreement applied to fiscal years 1998 

and 1999. 

g. The Respondent failed to submit its fiscal year 1997 audit report within 120 days 

of the end of Respondent's fiscal year. Furthermore, the Respondent failed to 

remit $5,000 within 20 days of the due date for submission of the audit report. 

The NIGC has not received the $5,000, nor has it received the audit report. The 

Respondent has been paying the $1,000 fine under the agreed upon schedule. 

h. On July 17, 1998, the MGC issued NOV-98-13 to the Respondent for failure to 

submit the annual audit report for fiscal year 1997. The NOV provided that, to 

correct the violation, the MGC must receive a signed bound copy of the fiscal year 

1997 audit report within 30 days of service of the NOV. The NOV was served on 

July 17, 1998. As of the date of this Notice of Violation and Temporary Closure 

Order, the NIGC has not received the fiscal year 1997 audit report. 

a. Pursuant to 25 C.F.R. 9 502.4 of the MGC's regulations, Class III gaming means 

all forms of gaming that are not class I gaming or class 11 gaming specifically including 

(but not limited to) any slot machines as defined in 15 U.S.C. 

5 1171 (a)(l) and electronic or electromechanical facsimiles' of any game of 

chance. 

b. Between November 13, 1998, and on or about December 8, 1998 the Respondent 

offered a variety of gambling devices for play at Respondent's gaming operation. 

Play of these devices falls within the definition of Class 111 gaming. The 

'I- I An electronic or electromechanical facsimile means any gambling device as defined in 15 

U.S.C. 5 1171(a)(2) or (3). 
Respondent does not have a compact with the State of Oklahoma which authorizes 

the playing of gambling devices at the Respondent's gaming operation. 

c. Accordingly, the Respondent is operating Class III games in the absence of a 

tribal-state compact in violation of 25 U.S.C. 8 2710(d) and 25 C.F.R. 

5 573,6(a)(ll). 

7. The Chairman of the Commission may rescind this Temporary Closure Order for good 

cause shown. 

8. Under 25 CFR $573.6(c), within seven (7) days after service of this Temporary Closure 

Order, the Respondent may request, orally or in writing, lnformal expedited review by the 

Chairman. The Chairman must complete such review within two (2) days after receipt of 

a timely request. Within two (2) days after the e-ed review provided by 25 CFR 

5573.6(c), the Chairman must decide whether to continue the Order and must provide the 

respondents with an explanation of the basis for the decision. 

9. Whether or not a Respondent seeks the informal expedited review described above, 

within 30 (thirty) days after service of this Order, the respondents may appeal to the 111 

Commission under 25 CFR Part 577 by submitting a notice of appeal to the National 

Indian Gaming Commission, 1441 L Street, NW, 9th Floor, Washington, D.C. 20005. 

The Respondent has a right to assistance of counsel in such an appeal. A notice of appeal 

must reference this Order. 

10. Within ten (10) days after filing a notice of appeal, the 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 the respondents wish to present oral testimony or witnesses at the hearing, 

the respondents must include a request to do so with the supplemental statement. The 

request to present oral testimony or witnesses must spec@ the names of proposed 

witnesses and the general nature of their expected testimony, whether a closed hearing is 

requested and why. The respondents may waive their right to an oral hearing and instead 

elect to have the matter determined by the Commission solely on the basis of written 

submissions. 

11. The measures required to correct the violations are: 

a. The NIGC must receive a signed bound copy of the fiscal year 1997 audit report.2 

The financial statements shall be prepared in accordance with generally accepted 

accounting principles and the audit report shall be based on an audit conducted in 

accordance with generally accepted accounting standards as required by 25 C.F.R. 

* The Respondent has ceased operation of the class III gaming devices at issue. 
5 571.12. The audit report should be submitted to: Chairman, National Indian 

Gaming Commission, 1441 L Street, NW, 9th Floor, Washington, DC 20005. 

b. The Respondent must demonstrate, in a manner satisfactory to the NIGC, the 

establishment and maintenance of satisfactory accounting systems and procedures 

that, at a minimum: 

i. Include an adequate system of internal accounting controls; 

ii. Permit the preparation of financial statements in accordance with 

generally accepted accounting principles; and 

iii. Are susceptible to audit. 

c. The NIGC must be satisfied that the gaming operation provides the tribal 

governing body not less frequently than monthly with verifiable financial reports or 

all information necessary to prepare such reports. 

d. The Respondent must produce current financial statements prepared in accordance 

with generally accepted accounting principles and must produce a current audit 

report based on an audit conducted in accordance with generally accepted 

accounting standards as required by 25 C.F.R 8 571.12. 

e. The Respondent must be in fill compliance with IGW NIGC regulations, and 

'(I- the Tribe's gaming ordinance. 

12. The violations cited in this NOV may result in the assessment of civil fines against the 

Respondent in an amount not to exceed $25,000 per violation per day. Under 25 C.F.R. 

9 575.5(a), the Respondent may submit written information about the violations to the 

NIGC Chairman within 15 days after service of this NOV (or such longer period as the 

NIGC Chairman may grant for good cause). The NIGC Chairman shall consider any 

information submitted in determining the facts mounding the violations and the amount 

of thC civil fine, if any. Such information should be submitted to the address set forth in 

paragraph 6. 

13. The Respondent may appeal the allegations contained in this NOV to the NIGC within 30 

days after sexvice of this NOV. 25 C.F.R. Part 577. The Respondent may appeal the 

allegations by submitting a Notice of Appeal to the NIGC at the address set forth in 

paragraph 6 above. The Respondent has a right to be represented by counsel in such an 

appeal. A Notice of Appeal must reference this NOV. Within ten (10) days after filing a 

Notice of Appeal, the Respondent must file with the NIGC a supplemental statement that 

states with particularity the relief desired and the grounds therefore and includes, when 

available, supporting evidence in the form of affidavits. 

14. If the Respondent wishes to present oral testimony or witnesses at a hearing, the 

rlwl Respondent must include a request to do so with the supplemental statement. The request 

to present oral testimony must specify the names of the proposed witnesses and the 
general nature of their expected testimony, and whether a closed hearing is requested and 

why. The Respondent may waive the right to an oral hearing and instead elect to have the 

matter determined by the NIGC solely of the basis of the written submissions. 

Montie R Deer, Chairman Date 

National Indian Gaming Commission 

Phone # (202) 632-7003 w 

Fax # (202) %3-7066 

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