Section 2.49 of the Ordinance provides a definition for primary management
official. Under the Ordinance, primary management official means: the
person having management responsibility for the overall operation of the
enterprise or Facility, or a management contract; or, any person who has
authority to (1) Hire and fire employees; or (2) Set up working policy for the
Gaming Operation; or the Chief Financial Officer or other Person who has
financial management responsibility.

Section 5.1.1 of the Ordinance requires that each Key Employee and Primary
Management Official have a current and valid license issued by the Tribal
Commission.

Section 5.3.2 of the Ordinance requires that the Tribal Gaming Commission
shall review diligently, the information provided in the Tribal Gaming License
Application, including, but not limited to, contacting and investigating all
resources identified in the Tribal Gaming License Application.

Sections 5.3.2 and 5.9 of the Ordinance require that an authorized Tribal
official review a gaming license Applicant’s prior activities, criminal record
(if any), reputation, habits, and associations in order to make’ an eligibility
determination for key employees and primary management officials and
where it is determined that the Applicant is unsuitable for work in a gaming
facility that the Tribe or a management contractor shall not employ the
Applicant.

Section 5.3.3 requires that the Tribal Gaming Commission will provide a
written report as to the findings and conclusions of the background
investigation including, but not limited to: steps taken in conducting diligence,
results of the conducted diligence and conclusions from review of conducted

diligence before issuing a key employee or primary management official a
license.

Section 5.3.4 of the Ordinance requires that the Tribal Gaming Commission
transmit the Applicant’s Application, file, and eligibility determination to the
NIGC.

Section 5.3.5 of the Ordinance requires that the Tribal Gaming Commission
shall maintain the Applicant’s file, including applications, background
investigation reports.


failed to review applicants’ background investigation reports,
including the results of federal criminal history checks, prior to
issuing gaming licenses to key employees and primary
management officials.

6. NIGC regulations require that a gaming operation shall not employ
a primary management official or key employee who does not have
a license after ninety (90) days. 25 C.F.R. § 558.3(b). The Tribe
allows employees to work with a temporary license for no more
than ninety (90) days, after which the employees must receive a
tribal employee license valid for a period of two years. 25 C.F.R.
§ 522.2(b), (c), (f), (h) and Ordinance §§ 5.7 and 5.8. Respondent
has failed to notify the NIGC of licenses issued to key employees
or primary employment officials.

Since the February 7, 2006, site visit, the Tribe has proceeded to process
the background investigations, make eligibility determinations, submit
investigative reports and eligibility determinations, or Notification of
results, to the NIGC and issue licenses.

6. Measures Required to Correct these Violations

In order to correct the past and ongoing violations of the IGRA, NIGC Regulations, and
the Tribe’s gaming ordinance, Respondent must:

A.

Within 15 days, starting from the date of service of this Notice of
Violation, collect fingerprint cards from all current casino employees who
hold key employee or primary management official positions at the Casino
and send them to the NIGC with appropriate fees for processing;

Within 30 days, starting from the date of service of this Notice of
Violation, perform complete background investigations and obtain FBI
criminal history checks on all current primary management officials and
key employees and create background investigation reports;

Within 45 days, starting from the date of service of this Notice of
Violation, review the completed background investigation Teports,
containing FBI criminal history information, key employees or primary
management officials and make eligibility determinations of suitability for
employment in a gaming operation;

10


As of February 7, 2006, at least ninety one (91) licensing files were
complete but were not completed within the required timeframe. The
submission of the investigative report and eligibility determination, or
Notification of Results, was not submitted to the NIGC within 60-days of
date of employment. Each of these employees has been employed for over
90-days without being properly licensed, including seventy five (75)
employees who had been employed for over a year.

i. Fifty six (56) of these files were for employees defined as key
employee or primary management official pursuant NIGC
regulations and the Tribal Gaming Ordinance. The Tribe has
chosen to adopt a broader definition of key employee which
resulted in an additional thirty five (35) employees being defined
as key employees or primary management officials.

In addition, as of February 7, 2006, at least forty three (43) licensing files
for current key employees and primary management officials were
identified where the NIGC did not receive a copy of the investigative
report and eligibility determination, or Notification of Results, despite the
fact that each employee had been employed in excess of 90-days. At least
thirty five (35) of these employees had been employed for over a year
without being properly licensed.

i. Thirty two (32) of these employees are defined as key employees
or primary management officials pursuant to NIGC regulations and
the Tribal Gaming Ordinance. The Tribe has chosen to adopt a
broader definition of key employee which resulted in an additional
eleven (11) employees being defined as key employees or primary
management officials.

In addition, as of February 7, 2006, at least forty five (45) licensing files
for current key and primary management officials did not contain an
eligibility determination and the NIGC did not receive a copy of the
investigative report and eligibility determination, or Notification of
Results, despite the fact that each employee had been employed in excess
of 90-days. At least twenty seven (27) of these employees had been
employed for over a year without being properly licensed.

i. Thirty (30) of these employees are defined as key employees or
primary management officials pursuant to NIGC regulations and
the Tribal Gaming Ordinance. The Tribe has chosen to adopt a
broader definition of key employee which resulted in an additional
fifteen (15) employees being defined as key employees or primary
management officials.


BB.

cc.

Section 5.4 of the Ordinance requires that key employee and primary
management official license applications submitted to the Tribal Gaming
Commission shall be forwarded to the NIGC, which shall be the Tribal
Gaming Commission’s authorized entity for processing fingerprint cards for
background investigations. The background investigation shall, at a
minimum, include a check of criminal history records information maintained
by the Federal Bureau of Investigation.

Section 5.7 permits the Tribal Gaming Commission to issue a temporary
license which may last no longer than 90 days to an Applicant who has
completed a license application.

Section 5.8.1 provides that upon completion of the necessary background
investigation, and after the Tribe has complied with the 30-day NIGC review
requirements found in 25 C.F.R. § 558.3 and §558.4, the Tribal Commission
may issue a license on a conditional or unconditional basis.

Section 5.8.2 of the Ordinance states that any employee license shall be valid
for a period of two (2) years.

4. Role of Background Investigations and Employee Licensing

The background investigation and licensing process for Key Employees and Primary
Management Officials is crucial to maintaining the integrity of Indian gaming.
Submission of the completed application, background investigation report, and licensing
determination to the NIGC so that it may object to the issuance of a license is an integral
part of this process as laid out in the IGRA. Gaming is a cash intensive business that
requires a carefully screened employee base and careful implementation of internal
controls. The background investigation and licensure process helps insure that employees
who have access to cash and other gaming resources are worthy of positions of trust.
Accordingly, under IGRA, the licensure of Key Employees and Primary Management
Officials is a key tribal governmental responsibility.

5. Circumstances of the Violation

A.

Respondent is a federally recognized Indian Tribe with tribal headquarters
in Lemoore, California.

Respondent operated its gaming facility, The Palace Indian Gaming Center
(The Palace), located at 17225 Jersey Avenue, Lemoore, California,
during all or part of the following years: 2000, 2001, 2002, 2003, 2004,
2005, and 2006.


employees or primary management officials, or, if it has begun the
background investigations, has obtained only partial results
insufficient to enable the Tribe to make eligibility determinations
of suitability for work in a gaming facility.

NIGC regulations require the Tribe to create and forward to the
NIGC background investigation reports including: (1) Steps taken
in conducting a background investigation; (2) Results obtained; (3)
Conclusions reached; and (4) The bases for those conclusions. 25
C.F.R. §556.5(b). The report must be forwarded to the
Commission within sixty (60) days after an employee begins work.
25 C.F.R. § 558.3(b).The Tribe has failed to prepare background
investigation reports for its employees, and has further failed to
forward such reports to the NIGC within sixty (60) days after an
employee has begun work.

NIGC regulations and the Tribe’s gaming ordinance require the
Tribe to collect fingerprint cards from each applicant, and to
process the cards for criminal history checks through the FBI
fingerprint database. 25 C.F.R. § 556.4(a)(14); Ordinance § 5.4.
The Tribe is to send the fingerprint cards to the NIGC for
processing. Ordinance § 5.4. The Tribe has failed to forward
fingerprint cards to the NIGC for processing of FBI criminal
history checks.

The IGRA, NIGC regulations, and the Tribe’s gaming ordinance
require the Tribe to make an eligibility determination of a person’s
suitability to work in a gaming operation. 25 U.S.C.
§2710(b)(2)(F)(ii)(); 25 C.F.R. §§ 556.5(c), 558.2; Ordinance §
5.3.2. The Tribe is to forward such eligibility determination to the
NIGC when forwarding the background investigation report. 25
C.F.R. § 558.2; Ordinance § 5.3.4. The Tribe has failed to make
eligibility determinations of a person’s suitability to work in a
gaming operation and has failed to forward such eligibility
determinations to the NIGC.

The IGRA and the Tribe’s gaming ordinance require the Tribe to
issue a Tribal license to each primary management official and key
employee. 25 U.S.C. § 2710(b)(2)(F\(ii)(D; Ordinance § 5.1.1.
The Tribe may not issue a license until the Tribal gaming
commission has reviewed the applicant’s background
investigation. Ordinance § 5.8.1. The Tribe must notify the
Commission of the background investigation results before issuing
a license to a key employee or primary management official. 25
U.S.C. § 2710(b)(2)(F)(ii)(II); Ordinance § 5.8.1. The Tribe has

9


National Indian Gaming Commission

NOTICE OF VIOLATION

To:

NOV-06-15

Clarence Atwell, Jr., Chairman

Santa Rosa Rancheria Tachi-Yokut Tribe
16835 Alkali Dr.

P.O. Box 8

Lemoore, California 93245

FAX: (559) 925-2931

Larry Sisco, Chairman (Agent for Service of Process)
Santa Rosa Rancheria Tachi-Yokut Tribe

Tribal Gaming Commission

P.O. Box 668

Lemoore, California 93245

FAX: (559) 924-0610

Office of the Tribal Attorney

Santa Rosa Rancheria Tachi-Yokut Tribe
16835 Alkali Dr.

P.O. Box 8

Lemoore, California 93245

FAX: (559) 925-2931

. Notification of Violation

The Chairman of the National Indian Gaming Commission (NIGC) hereby gives notice
that the Santa Rosa Rancheria Tachi-Yokut Tribe, formerly known as the Santa Rosa
Rancheria, Santa Rosa Rancheria Tachi Tribe and the Santa Rosa Band of Tachi Yokut
Tribe (Respondent or Tribe), located in Lemoore, California, is in violation of the Indian
Gaming Regulatory Act (IGRA) and NIGC regulations for failure to conduct background
investigations, including federal criminal history checks, on key employees and primary
management officials, failure to make eligibility determinations of suitability for
employment in a gaming operation based on sufficient background investigations, and
failure to notify the NIGC when it licenses key employees and primary management

officials.


8. Temporary Closure Order or Fine--Submission of Information

The violation cited above may result in a.temporary closure order or 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 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.

AM /
ae oe

National Indian Gaming Commission

ELL AL tft

ESTHER F. DITTLER
Staff Attorney

12


Dz. Within 60 days, starting from the date of service of this Notice of
Violation, notify the NIGC whether a key employee or primary
management official has been granted a Tribal gaming license and submit
to the NIGC a copy of the completed employment application, background
investigation report, and eligibility determination;

E. Commencing 90 days after date of service of this Notice of Violation, not
employ any persons hired as of the date of service of this Notice of
Violation, as key employees or primary management officials whose
ninety (90) day temporary licenses have expired;

F. Licensing for all new key employees and primary management officials
hired after the date of service of this Notice of Violation be completed
within ninety (90) days from date of hire; and

G. Notify the NIGC in 15 day intervals, starting from the date of service of
this Notice of Violation, of the measures taken to correct this violation.
The required information must be submitted to the Chairman, National
Indian Gaming Commission, 1441 L Street, NW, Suite 9100, Washington,
DC 20005.

7. 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 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.

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 Tequest
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.

11


In addition, as of February 7, 2006, at least seventy six (76) licensing files
for current key employees and primary management officials, as defined
by NIGC regulations and the Tribal Gaming Ordinance, did not contain an
investigative report and eligibility determination. Further, the NIGC did
not receive a copy of the investigative report and eligibility determination,
or Notification of Results, despite the fact that each employee had been
employed in excess of 90-days. At least forty seven (47) of these
employees had been employed for over a year without being properly
licensed.

In addition, as of February 7, 2006, at least six (6) licensing files for
current key employees and primary management officials did not contain
Criminal History Record Information, an investigative report, and an
eligibility determination. Further, the NIGC did not receive a copy of the
investigative report and eligibility determination, or Notification of
Results, despite the fact that each employee had been employed in excess
of 90-days. Five (5) of these employees had been employed for over a
year without being properly licensed.

i. Three (3) of these employees are defined as key employees or
primary management officials pursuant to NIGC regulations and
the Tribal Gaming Ordinance. The Tribe has chosen to adopt a
broader definition of key employee which resulted in an additional
three (3) employees being defined as key employees or primary
management officials.

The Tribe is in violation of the IGRA, NIGC regulations, and the Tribal
gaming ordinance as follows:

1. The IGRA and NIGC regulations require the Tribe to conduct
background investigations of applicants for key employee or
primary management official positions 25 U.S.C. §
2710(b)(2)(F)(i); 25 C.F.R. §§ 556.4, 558.3(a)(2). That background
investigation shall be sufficient to enable the Tribe to make an
eligibility determination of an individual’s suitability to work in
the Tribe’s gaming operation. 25 C.F.R. § 556.4(b). The Tribe’s
gaming ordinance requires the Tribal Gaming Commission shall
conduct a background investigation of each key employee and
primary management official sufficient to make an eligibility
determination. Ordinance § 5.3. The Tribe’s gaming ordinance
further requires that the Tribal Gaming Commission shall review
diligently, the information provided in the license application of
each key employee and primary management official, including
criminal record, if any. Ordinance § 5.3.2. The Tribe has failed to
conduct background investigations on its currently employed key

8


25 C.F.R. § 558.3(a)(1) NIGC regulations require that a tribal gaming
operation forward the Commission a completed application for employment
when a key employee or primary management official begins work at a tribal
gaming operation.

25 C.F.R. § 558.3(a)(2) NIGC regulations require that a tribe conduct a
background investigation pursuant to 25 C.F.R. Part 556 to determine the
eligibility of key employee or primary management official for continued
employment in a gaming operation.

25 C.F.R. § 558.3(b) NIGC regulations require that, upon completion of a
background investigation and a determination of eligibility for employment in
a gaming operation, a tribe shall forward a report to the Commission within
sixty (60) days after an employee begins work or within sixty (60) days of the
Chairman's approval of an ordinance under 25 C.F.R. Part 523.

25 C.F.R. § 558.3(b) NIGC regulations require that a gaming operation shall
not employ a key employee or primary management official who does not
have a license after ninety (90) days.

Section 2.37 of the Tribal Gaming Ordinance of the Santa Rosa Rancheria
Tachi-Yokut Tribe (Ordinance), approved by the NIGC Chairman on
February 1, 2006, provides a definition for key employee. Under the
Ordinance, key employee means a person who performs one or more of the
following functions: (1) Bingo caller; (2) Counting room supervisor and
Personnel; (3) Chief of security, or any person who supervises or directs other
employees engaged in providing security or surveillance services; (4)
Custodian of Gaming supplies or cash; (5) Floor manager, manager or General
manager; (6) Pit boss; (7) Dealer; (8) Croupier; (9) Approver of credit or
whose recommendation in this regard are ordinarily sought or followed; or
(10) Custodians of gambling devices including persons with access to cash
and accounting records within such devices; If not otherwise included, any
other Person whose total cash compensation is in excess of $50,000 per year;
or if not otherwise included, an other person who supervises or directs other
employees engaged in the control of Gaming assets and revenues and record
keeping, including the recording of cash and evidence in indebtedness, and the
maintenance, review, or control of the records, accounts, and reports of
transactions; or If not otherwise included, the four most highly compensated
persons in the Gaming Facility, or Any Applicant or Person the Tribal
Commission finds is important or necessary to the operation of the Gaming
Facility.


23 C.F.R. § 502.19 — NIGC regulations define primary management official to
mean: (a) The person having management responsibility for a management
contract; (b) Any person who has authority: (1) To hire or fire employees; or
(2) To set up working policy for the gaming operation; or (c) The chief
financial officer or other person who has financial management responsibility.

25 C.F.R. § 556.4 — NIGC regulations require that a tribe shall perform a
background investigation for each primary management official and for each
key employee of a gaming operation.

25 C.F.R. § 522.2(h) and 25 C.F.R. § 556.4(a)(14) — NIGC regulations require
that a tribe shall collect fingerprints from an applicant for a primary
management official or key employee position and conduct a criminal history

check including a check of the criminal history record information maintained
by the FBI.

25 C.F.R. § 556.4(b) - NIGC regulations require that a tribe shall conduct an
investigation sufficient to make a suitability determination regarding the
licensing of the person pursuant to 25 C.F.R. § 558.2.

25 C.F.R. § 556.5(a) - NIGC regulations require that when a tribe employs a
primary management official or a key employee, the tribe shall forward to the
Commission a completed employment application.

25 C.F.R. § 556.5(b) — NIGC regulations require that, before issuing a license
to an employee, a tribe shall forward to the Commission an investigative
report on each background investigation including the following: (1) Steps
taken in conducting a background investigation; (2) Results obtained; (3)
Conclusions reached; and (4) The basis for those conclusions.

25 C.F.R. § 556.5(c) — NIGC regulations require that a tribe shall include a
copy of the eligibility determination made by the tribe pursuant to 25 U.S.C.
§ 558.2 with the investigative report forwarded to the Commission.

25 C.F.R. § 558.2 — NIGC regulations require that an authorized tribal official
shall review a person's prior activities, criminal record, if any, and reputation,
habits and associations to make a finding concerning the eligibility of a key
employee or a primary management official for employment in a gaming
operation. If the authorized tribal official, in applying the standards adopted in
a tribal ordinance, determines that employment of the person poses a threat to
the public interest or to the effective regulation of gaming, or creates or
enhances the dangers of unsuitable, unfair, or illegal practices and methods
and activities in the conduct of gaming, a management contractor or a tribal
gaming operation shall not employ that person in a key employee or primary
management official position.

3


2. Authority

Under regulations of the National Indian Gaming Commission, 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
CFR. § 573.3.

3. Applicable Federal and Tribal Laws

A. 25 U.S.C. § 2710(b)(2)(F)(i) - IGRA requires that a tribe have in place an
adequate system to ensure that background investigations are conducted on
key employees and primary management officials of a gaming operation.

B. 25 U.S.C. § 2710(b)(2)(F)Gi)() - IGRA requires that tribal gaming operations
issue tribal licenses for primary management officials and key employees of
the gaming enterprise with prompt notification to the Commission of the
issuance of such licenses.

Cc. 25 US.C. § 2710(b)(2)(F)(ii)(I) — IGRA requires that a tribal gaming
operation shall maintain a standard whereby any person whose prior activities,
criminal record, if any, or reputation, habits and associations pose a threat to
the public interest or to the effective regulation of gaming, or create or
enhance the dangers of unsuitable, unfair, or illegal practices and methods and
activities in the conduct of gaming shall not be eligible for employment.

D. 25 US.C. § 2710(b)(2)(F)(ii)(ID) - IGRA requires that a tribal gaming
operation notify the Commission of the background investigation results
before issuing a license to key employees or primary management officials.

E. 25 C.F.R. § 502.14 —NIGC regulations provide define key employee to mean:
(a) A person who performs one or more of the following functions: (1) Bingo
caller; (2) Counting room supervisor; (3) Chief of security; (4) Custodian of
gaming supplies or cash; (5) Floor manager; (6) Pit boss; (7) Dealer; (8)
Croupier,; (9) Approver of credit; (10) Custodian of gambling devices
including persons with access to cash and accounting records within such
devices; (b) If not otherwise included, any other person whose total cash
compensation is in excess of $50,000 per year; or, (c) If not otherwise
included, the four most highly compensated persons in the gaming operation.