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Nevada Gold & Casinos Accused of Conspiracy

2 November 2004

LOS ANGELES, California -- (PRESS RELEASE) -- Rinaldo Corporation, an Illinois-based developer of gaming properties, filed suit against gaming company Nevada Gold & Casinos, Inc., and three alleged co conspirators, Sierra Research & Consulting, Ltd., Michael Derry and Shelia Torkelson. Filed in the Kern County, California Superior Court, the suit seeks up to $50 million in compensatory damages, an injunction against further unlawful activity, restoration of amounts the defendants unlawfully received and unspecified punitive damages.

"The defendants conspired to interfere with Rinaldo's existing contract with the Timbisha Shoshone Tribe of California to develop a casino and 300-room resort property on tribal trust lands in Hesperia, California," explained Neil Soltman, Rinaldo's attorney and a partner in the Los Angeles office of Mayer, Brown, Rowe & Maw.

The lawsuit alleges that Sierra Research & Consulting and two employees, Torkelson, formerly the Tribe's Administrator, and Derry, former consultant to the Tribe, failed to disclose their involvement in a secret agreement with Nevada Gold designed to undermine Rinaldo's agreement with the Tribe and acquire rights to operate the Hesperia casino.

According to the amended Complaint, the conspiracy involved secret meetings between Nevada Gold, Torkelson, Derry, and certain members of the Tribal Council controlled by Torkelson and Derry, including one at which Nevada Gold's Vice President, Don Brennan, procured female strippers to perform for members of the Tribal Council.

The Complaint quotes Torkelson as saying "you have to be nice to the Indians because that's how you get them to waive sovereign immunity and that's how I will get Nevada Gold to give me and Michael [Derry] a percentage of the revenue." The amended Complaint also quotes Nevada Gold's President and CEO, Tom Winn, as admitting that its proposed management agreement with the Tribe is just the first step toward entering into a development agreement with the Tribe "as soon as the Tribe [breaks] its existing development agreement with Rinaldo."

Nevada Gold is also alleged to have advanced funds to the Torkelson/Derry group to fund efforts to interfere with and eventually break the valuable Rinaldo contract. Mr. Winn is quoted as saying that Nevada Gold could not fund such efforts directly because that would be "tortious interference and against the law." The lawsuit alleges that this organized plan was an unlawful conspiracy to deprive Rinaldo of the legitimate benefits of its investment in the Hesperia project.

For the past two years Rinaldo has been developing the casino and resort in Hesperia, California with the Timbisha Shoshone Tribe.

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