My belief from what i had read was that his gang ties were at home and I would guess you are right about that and they knew about those relationships but like other kids were hoping they were a thing of the past and wouldn't seriously effect his NFL career, and you are right, that's somewhat commonplace. What i really wonder about is how much they knew or heard about his activities at Florida, and in particular the gun related incidents and possible shooting, and i would hope they didn't know about those concerns and if they did they shouldn't have touched him if they believed those allegations had credibility, and as has been pointed out the real problem is the second contract, as it should have had conditions and they should have had a much better idea of who he really was and what he really was about at that point.
I always thought Hernandez was worth the risk given what we knew but i didn't know about the possible involvement in shootings while at Florida, that information came out after the Lloyd shooting.