November 19, New York – The former CEO of BIT Mining Ltd., the Chinese-based cryptocurrency and technology company formerly known as 500.com, has been indicted on charges of violating the U.S. Foreign Corrupt Practices Act (FCPA). The charges were in connection with a scheme to bribe Japanese government officials to win a bid for a luxury casino contract.
The former CEO, Zhengming Pan, who led the company during the alleged illicit activities, faces multiple charges related to conspiracy, bribery, and falsifying corporate records.
The indictment, unsealed yesterday in the District of New Jersey, stems from an investigation by the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) into BIT Mining’s activities. Specifically, a scheme to pay nearly $2 million in bribes to Japanese government officials. According to the charges, the bribes were intended to secure a contract for the company to develop an integrated resort, including hotels, casinos, and entertainment venues, in Japan. The bribes were funneled through intermediaries, disguised as consulting fees, travel expenses, and gifts, and were recorded as legitimate business expenses in company books.
Despite these efforts, BIT Mining ultimately did not win the resort contract. The company, however, has admitted to the criminal conduct and entered into a deferred prosecution agreement (DPA) with the Justice Department.
As part of the resolution, BIT Mining received a reduced penalty of $10 million, significantly less than the $54 million calculated under U.S. Sentencing Guidelines. This reduction was based largely on the company’s financial condition and the fact that it could not otherwise pay the full $54 million. As is typical, the DOJ credited BIT Mining for implementing remedial measures to improve its compliance and governance structures.
The charges against Pan reflect the seriousness with which U.S. authorities view bribery of foreign officials. “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,” said U.S. Attorney Philip R. Sellinger. “This agreement and indictment hold both the corporation as an entity and its top leadership accountable.”
The FBI also emphasized the importance of holding individuals accountable for such schemes. “Paying bribes to foreign government officials is a serious crime,” said FBI Assistant Director Chad Yarbrough. “The FBI will relentlessly pursue those involved in illegal schemes creating unfair advantages and ensure they face the full consequences of the law.”
The case highlights an uptick in FCPA enforcement activity this year after a quiet start to the year.
