An indictment was unsealed, charging Zhengming Pan, the former CEO of 500.com, now BIT Mining Ltd., with violations of the Foreign Corrupt Practices Act (FCPA). This follows BIT Mining Ltd.'s agreement to resolve investigations by the Justice Department and the Securities and Exchange Commission (SEC) related to its involvement in a scheme to bribe Japanese officials.
BIT Mining has entered into a three-year deferred prosecution agreement (DPA) with charges filed in New Jersey. The company is charged with conspiracy to violate anti-bribery and books and records provisions of the FCPA. An indictment against Pan includes conspiracy to violate these provisions and specific counts for both anti-bribery and books and records violations.
"BIT Mining, under the alleged direction of then-CEO Zhengming Pan, agreed to pay nearly $2 million in bribes to Japanese government officials," stated Principal Deputy Assistant Attorney General Nicole M. Argentieri. "Pan has been indicted for his alleged role in directing company consultants to pay the bribes."
U.S. Attorney Philip R. Sellinger added, "Paying bribes to foreign government officials is a serious crime. The illegal scheme started at the top, with the company’s CEO allegedly fully involved." He noted that BIT Mining admitted its crimes and agreed on a $10 million penalty.
Assistant Director Chad Yarbrough from the FBI remarked on their commitment to holding individuals accountable: "This type of criminal activity undermines business practices."
Court documents reveal that between 2017 and 2019, BIT Mining admitted its then-CEO Pan directed $1.9 million in bribes through intermediaries aiming for a resort bid in Japan. Despite these efforts, 500.com did not secure the bid.
Under the DPA, BIT Mining's criminal penalty was set at $54 million based on U.S. Sentencing Guidelines but adjusted due to financial constraints, resulting in an agreed payment of $10 million.
BIT Mining will continue cooperating with authorities and enhancing compliance programs during this three-year term. Factors considered in this resolution include offense severity and cooperation level with authorities.
The FBI’s International Corruption Unit is investigating, while prosecution involves Trial Attorneys Jil Simon and Ligia Markman from the Criminal Division’s Fraud Section alongside Assistant U.S. Attorney Jennifer Kozar from New Jersey.
The Justice Department’s Office of International Affairs received support from Japanese authorities on this matter.
An indictment remains an allegation; all defendants are presumed innocent until proven guilty beyond reasonable doubt in court.