Former CEO of BIT Mining Indicted for Bribery; Company Resolves Foreign Corruption Investigation

Deferred prosecution agreement includes $10 million penalty and compliance measures.

NEW JERSEY - The former CEO of 500.com, now known as BIT Mining Ltd., Zhengming Pan, has been indicted for his role in a bribery scheme involving payments to Japanese government officials. BIT Mining Ltd. has simultaneously resolved related violations of the Foreign Corrupt Practices Act (FCPA) through a deferred prosecution agreement (DPA) with the U.S. Department of Justice and the Securities and Exchange Commission (SEC).

Allegations Against Pan and 500.com

According to court documents, Pan and others conspired to pay approximately $1.9 million in bribes between 2017 and 2019. The bribes, which were funneled through third-party consultants, aimed to secure a bid to develop an integrated resort in Japan. Payments were disguised as legitimate expenses under sham contracts for services such as "management advisory fees." Despite the scheme, 500.com failed to win the resort bid.

A federal grand jury in the District of New Jersey indicted Pan on June 18. The charges include conspiracy to violate the FCPA’s anti-bribery and books and records provisions, direct violations of these provisions, and falsifying corporate records to conceal the payments.

“Paying bribes to foreign government officials is a serious crime. The top leadership of BIT Mining, then known as 500.com, directed consultants to pay bribes to Japanese government officials to win a bid to open a large resort in Japan. 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. The company has admitted its crimes and agreed to pay a $10 million penalty, and its then-CEO has been charged for his role in the scheme. This agreement and indictment hold both the corporation as an entity and its top leadership accountable,” said U.S. Attorney Philip R. Sellinger.

Deferred Prosecution Agreement Terms

Under the DPA, BIT Mining admitted to its role in the bribery scheme and agreed to pay a $10 million criminal penalty. This penalty, significantly reduced from $54 million due to the company’s financial condition, includes up to $4 million credited toward a parallel civil penalty imposed by the SEC.

The agreement also requires BIT Mining to:

Enhance its compliance programs, including anti-corruption policies and training.
Report on its compliance efforts for three years.
Continue cooperating with ongoing or future investigations.

Mitigation Efforts by BIT Mining

The company has taken steps to address its governance and compliance shortcomings, including:

Strengthening Board oversight of compliance risks and audit findings.
Promoting ethics through company-wide communications.
Incorporating compliance criteria in senior management evaluations.
Adopting an anti-corruption policy and conducting annual risk assessments.
Transitioning to a lower-corruption-risk industry and reducing its presence in high-risk regions.

These efforts earned BIT Mining a 10% reduction in its criminal penalty under U.S. Sentencing Guidelines.

“BIT Mining, under the alleged direction of then-CEO Zhengming Pan, agreed to pay nearly $2 million in bribes to Japanese government officials to win a contract to open a lucrative resort and casino in Japan,” Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, said. “Pan has been indicted for his alleged role in directing company consultants to pay the bribes and to conceal the illicit payments through sham consulting contracts. Today’s resolution and the charges against Pan demonstrate the department’s continued commitment to holding both corporate and individual wrongdoers accountable for their crimes.”

Ongoing Investigations

The FBI’s International Corruption Unit, along with the Justice Department’s Fraud Section and the U.S. Attorney’s Office for the District of New Jersey, is leading the investigation. Assistance from Japanese authorities and the Justice Department’s Office of International Affairs was critical in advancing the case.

Pan’s indictment remains an allegation, with all defendants presumed innocent until proven guilty in court.

For more information on the Justice Department’s FCPA enforcement efforts, visit justice.gov/criminal-fraud/foreign-corrupt-practices-act.