National Indian Gaming Commission 

NOTICE OF PROPOSED CIVIL FTNE ASSESSMENT 

Ref: CFA-08-05 

To: Crow Crcek Tribe 

Attn: Lester Thompson, Jr. 

Chairman and Agent for Sewice of Process 

P.O. Box 50 

Fort Thompson, SD 57339 

FAX: (605) 245-2470 

1. Under the authority of 25 U.SmC. 5 2713(a), of the Indian Gaming Regulatory Act 

(IGRA), and the reglations of the National Indian Gzming Commission (NIX) at 25 

C.F.R. part 575, the Chairman of the MGC hereby provides notice of his intent to assess 

a civil fine against the Crow Creek Tribe (Respondent), located in Fort Thompson, South 

Dakota (Respondent), for violations of 25 U.S.C. ?$ 2710(b)(Z)(C), 25 C.F.R. 59 571,12- 

57 1.13, and Section 32 of the Crow Creek Tribe Gaming Ordinance, as set forth in detaiI 

in Notice of Violation No. NOV-08-05, issued on May 23, 2008. NOV-08-05 was issued 

for faiIure to submit a timely annual audit report for the Lade Star Casino & Hotel. 

2. Pursuant to 25 U.S.C. 8 2713 (a) and 25 C.F.R. 5 575.4, the Chaiman of the NlGC may 

assess a civil fine, not to exceed $25,000 pet violation, against a tribe, management 

contractor, or individual operating Indian gaming for each violation cited in a notice of 

violation issued under 25 C.F.R. 8 573.3. If noncompliance continues for more than one 

day, the Chairman may treat each daily illegal act or omission as a separate violation. 

25 C.F.R. fi 575.4(a)(2). 

3. The NJGC regulations at 25 C.F.R. 4 575.5 provide that, within I5 days after service of a 

notice of violation, os such longer period as the Chairman may grant for good cause, the 

respondent may submit written information about the violation. TIE Chaiman shall 

consider any information so submitted in determining the facts surrounding the violation 

and the amount of the civil fine. Respondent did not submit information regarding the 

violation under 25 C.F.R. 8 575.5. 

4. The Chairman has considered the factors set forth in 25 C.F.R. 5 575.4 and finds the 

following: 

i. - Economic -- benefit of noncom~Iiance. Respondent obtained a slight economic 

benefit from the untimely filing of the audit reports. The Tribe did not submit the 

audit report by January 28 because, as represented by a tribal employee, the Tribe 
had not yet paid for it. Therefore, the Tribe was able to collect interest on money 

that othewise would have gone toward paying for the audit repert until it fmally 

made payment on or about April, 2008. Exhibit 11. 

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1. Seriousness of the violation. It is the declared poIicy of the TGRA to provide a 

statutory basis for the regulation of gaming by an Indian bibe adequate to shield if 

from organized crime and other corrupting influences; to ensure that the Indian 

tribe is the primary beneficiary of the gaming operation; and to assure that gaming 

is conducted fairly and honestly by both the operator and players. 25 U.S.C. 

8 2702. Accordingly, the IGM requires an outside annual audit of the gaming, 

25 U.S.C. Ij 27IO(b)(2)(C), and NIGC regulations cIarify this means each tribe 

"shall engage an independent certified public accountant to provide an annual 

audit of the financial statements of each gaming operation on Indian lands." 25 

C.E.R. 1$ 571.12. The financia1 statements are required to be prepared in 

accordance with generally accepted accounting principles and generaIly accepted 

accounting standards, id., and the audit is required to be submined within 120 

days after the end of each fiscaI year of the gaming operation. 25 C.F.R. 9 571 -73. 

Submission of the annual independent audit report by an independent accountant 

is critical to the NIGC's mission to protect the integrity of Indian gaming. An 

accountant's ability to conduct an audit in accordance with generally accepted 

auditing standards and render an opinion en the financial statements prepared in 

conformity with generally accepted accounting principals provides assurance as to 

the security of tribal gaming revenues. The audit report prepared and submitted 

on a timely basis is evidence of, among other things, the integrity of the gaming 

operation and, more specificalIy, of thc adequacy of the books and records, the 

fhctioning of the internal financial controls, and the disclosure of information 

having a bearing on the financial statements. Further, 25 C.F.R 571.12 is 

explicit: the annual submission must be for the business year end and the financia1 

statements must be audited and certified by an independent certified public 

accountant. Only after the financial statements of a gaming operation have been 

audited 'and the results certified by a certified pubIic accountant can the MGC 

acquire confidence in the data sufficient to rely upon it. Such reIiance is necessary 

to assure that the results of the analytical procedure performed by the NTGC will 

be effective in the identification of gaming operations possessing a high risk of 

regulatory noncompliance. 

The audited financial statements are only useful if they are timely. The 120 day 

period after the end of the fiscal year is the time afforded the independent certified 

public accountant to perform such testing of the financial data necessary to 

express an opinion on the fairness of the financial statements. Any delay in 

receipt of the financial statements significantIy reduces the reIiability and 

relevancy of the data to the NIGC. The NIGC uses the audited financial 

statements to measure regulatory compliance, which directly dates to thc 

detection and remediation of potential and actual integrity violations. 

Respondent's filing of its annuaI financial statements 84 days past the required 
submission date, nearly seven months past the business year end, reduces the 

usefulness of the data and increases the probability that, if ineguIarities existed, 

successfuE investigation thereof would be unlikely. 

iii. Histon, of violations. This is the Tribe's first violation. 

iv. Negli~ence or willfulness. The Tribe was aware of the audit report due date, as 

indicated by the January 28, 2008 phone call from Crow Creek Sioux Tribe 

(CCST) Gaming Commission Executive Secretary Dada Fallis, to Jim McKee, 

NIGC Field Investigator, 2005. Exhibits 1 and 2. Fallis stated that the audit report I would be late and that no internal auditor had been hired yet. 

On January 3 1, 2008, Karrie Donner, General Manager of the Casino, submitted 

the Tribe's Agreed Upon Procedures and Minimum Internal Control Standards 

report. Field Investigator McKee emailed the reguIations relating to annual audit 

requirements. Exhibits 1,3, and 4. 

On February 20, 2008, FaIIis stated to Field investigator McKee that she would 

check on the status of the audit report. Exhibits 1 and 5. 

On March 12, 2008, CCST Council Member Erick Voice stated in a telephone 

conversation that he had received a dcaft copy of the annual audit. He stated that it 

either had been or was about to be submitted to the NIGC. Exhibits 1 and 6. 

On March 25, 2008, Casino General Manager Donner attempted to mail a copy 

of the annual audit to me, but the fiIe could not be opened by fiejd investigator 

McKee. On March 27, McKee sent an ernaiI to Donner informing her that he was 

unable to open the attachment. Exhibits 1 and 7. 

On March 28, 2008, Field investigator McKee again notified Donner that NIGC 

had not received the audit report. Exhibit 8. 

On March 31,2008, Donner mailed a copy of the audit report, but it was marked 

"'PreliHlinary." Exhibits 1 and 8,9. 

On April 3, 2008, Field investigator McKee sent an email to Donner explaining 

that NGC needs a final audit rather than a preliminary one. Exhibits 1 and 10. 

On April 3, 2008, Donner explained to Field investigator McKee by email that 

she had not yet received the final audit, but would send it as soon as she got it. 

Exhibits I and 10. 

On April 21, 2008, Donner sent the final audit report to McKee by email, 

apologizing for it taking so long, but explaining she needed resoIution and 

payment before they sent it. Exhibits 1 and 1 1. 
As Respondent was aware of the submission deadline, and that preliminary audits, 

though aIse untimely, did not meet the submission requirements. Respondent's 

late submission of the annual audit reports for Lode Star Casino & Hotel for fiscal 

year 2006-2007, was therefore wiIEful rather than negligent. 

v. Good faith. A civil fine may be reduced based upon the degree of good faith of a 

respondent in attempting to achieve rapid compliance after notice of a violation. 

In this matter, the Tribe submitted the audit report for Lode Star Casino & Hotel 

before the notice of vialation was issued; this factor is therefore inapplicable. 

WHEREFORE, the Chairman, having carefully reviewed the above factors, has 

determined that a fine in the amount of $10,000 (ten thousand dollars) is assessed on the 

Respondent far failure to submit timely annual audit reports for the Lode Star Casino & 

Hotel. The fine is due forty-five (45) days from the date of this Civil Fine Assessment. 

Interest shall be assessed at rates established from time to time by the Secretary of the 

Treasury on amounts remaining unpaid aFter their due date. 3 1 rLT.S.C. 9 371 7. 

Aiter balancing the factors, the Chairman believes a $10,000 finc is appropriate. The 

Tribe has presented no evidence of extenuating circumstances under 25 C.F.R. 6 575.5. 

Therefore, the only circumstances which wouId explain the @-day delinquency appear in 

an April 21, 2008 email from tribal empIoyee Donnes to field investigator McKee 

referencing the need for "resolution and payment before they sent [the audit]." Exhibits I 

and 11. The audit report is due at the same time every year, and the statute allows the 

Tribe 120 days after the close of the fiscal year for preparation of the audit. An additiona1 

delay of nearly 3 months significantly reduces the reliability and relevancy of the data to 

the MGC. In light of the Tribe9s history of compliance and the Tribe's limited economic 

benefit from the vioIation, the Chairman finds a fine of $10,000 appropriate for such 

willfuI and excessive delinquency in meeting a serious statutory requirement. 

Pursuant to 25 C.F.R $ 577.3, within 30 (thirty) days after service of this Notice of 

Proposed Civil Fine Assessment, Respondent may appeal the proposed finc to the full 

Commission by submitting a notice of appeal to the National Indian Gaming 

Commission, 1441 L Street, NW, Suite 9 1 00, Washington, DC 20005. Respondent has a 

right to assistance of counsel in such an appeal. A notice of appeal must identify this 

Notice of Proposed Civil Fine Assessment. Within ten (1 0) days after filing a notice of 

appeal, Respondent must file with the Cornmission a suppIemental statement that sets 

forth 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, and whether a closed hearing is requested and why. Respondent 

may 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. 
Dated thid -- 7 day of June 2008. 

Jennifer Ward 

Staff Attorney 

20241 8-98 14 
CERTIFICATE OF SERVICE 

I certify that this NOTICE OF PROPOSED CIVIL FINE ASSESSMENT has been sent by 

facsimile and certified mail this 27th day of June, 2008, to: 

Crow Creek Tribe 

Attn: Lester Thompson, Jr. 

Chairman and Agent for Service of Process 

P.O. Box 50 

Fort Thompson, SD 57339 

FAX: (605) 245-2470 

* Fra cs Frag a