BIT Mining, formerly known as 500.com, has settled with the U.S. Department of Justice and SEC over Foreign Corrupt Practices Act (FCPA) violations.
At the same time, its former CEO, Zhengming Pan, faces criminal charges for orchestrating bribes to Japanese government officials in a failed casino resort bid scheme.
US DOJ unsealed an indictment against Pan
The Justice Department has released an indictment charging Pan, a Chinese national, with several FCPA crimes. The allegations include conspiring to violate anti-bribery and books and records laws, directly violating anti-bribery rules, and two counts of books and records offenses. An indictment was delivered by a federal grand jury in the District of New Jersey on June 18.
Bit Mining acknowledged organizing nearly $1.9 million in bribes and middleman payments to Japanese government officials between 2017 and 2019, while led by Pan.
The company, then operating as 500.com, aimed to secure a bid for developing an integrated resort featuring hotels, casinos, retail, dining, and entertainment venues in Japan.
According to Principal Deputy Assistant Attorney General Nicole M. Argentieri, Pan allegedly directed company consultants to execute the bribe payments and conceal them through fraudulent consulting contracts.
The plan featured cash transfers, travel expenditures, entertainment, and gifts that were improperly reported as legitimate company expenses, including management advice fees.
BIT Mining to pay a penalty of $10 million
The company’s three-year deferred prosecution agreement includes several key provisions. While the original criminal penalty assessment reached $54 million, the payment was reduced to $10 million due to financial constraints.
The agreement allows for up to $4 million in credit against SEC civil penalties and requires ongoing cooperation with authorities alongside enhanced compliance program requirements.
“The illegal scheme started at the top, with the company’s CEO allegedly fully involved in directing the illicit payments and the subsequent efforts to conceal them,” stated U.S. Attorney Philip R. Sellinger.
The Justice Department acknowledged several remedial actions taken by Bit Mining. The company increased board oversight of compliance risks, enhanced company-wide compliance communications, and implemented compliance criteria in management evaluations.
They also developed anti-corruption policies and transitioned their business model to reduce corruption risks. These efforts resulted in a 10% reduction in penalties, though the department noted the company’s cooperation was “reactive and limited in degree and impact.”
The resolution reflected a 10% reduction in penalties due to these efforts, though the department noted the company’s cooperation was “reactive and limited in degree and impact.” The FBI’s International Corruption Unit led the investigation, with support from the Justice Department’s Office of International Affairs and Japanese authorities.
“Today’s indictment against the former CEO of BIT Mining for bribing Japanese officials highlights the FBI’s commitment to holding individuals accountable for illegal conduct,” said Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division.
The case represents another action in the Justice Department’s ongoing efforts to enforce anti-corruption laws and hold both corporations and individuals accountable for international bribery schemes.
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