BIT Mining: The Casino Bid Behind the Fake Research

The BIT Mining FCPA case brought a $4 million civil penalty from the Securities and Exchange Commission over Japanese casino-bribery allegations involving the company formerly known as 500.com. Under its deferred prosecution agreement with the Justice Department, the company admitted using consultants, cash and luxury travel to buy official support for a casino bid it never won. For an insider, the telling detail is how those payments became ordinary-looking research and advisory expenses.

The Casino Business Behind the BIT Mining Case

500.com was an online sports-lottery company headquartered in Shenzhen, China, when it pursued a Japanese casino business from 2017 to 2019. Its securities traded on the New York Stock Exchange. By the time of the commission’s November 2024 order, the company had become BIT Mining and moved into cryptocurrency mining. The casino payments belonged to its earlier business.

The commission described a company looking for a way out of a failing market. After Chinese rule changes, 500.com suspended its online lottery services in April 2015 and its net revenues fell substantially. Japan then opened a different opportunity: legislation in 2016 and 2018 allowed a limited number of integrated resorts combining casinos with hotels, convention facilities, entertainment and shops. Winning official support meant a chance to enter a newly opened market.

500.com created a Tokyo subsidiary to pursue that opportunity and hired consultants to reach officials with influence over it. In the statement of facts attached to its deferred prosecution agreement, the company admitted that its chief executive directed the effort to pay bribes. The agreement reproduced a consultant’s translated response to concerns about competing openly against major European or American businesses:

The public competition was the obstacle the consultants wanted to get around. We see the unfairness plainly: companies preparing a competitive resort proposal were up against a plan to buy the officials who could influence it.

How the Value Reached Japanese Officials

A Lecture Fee That Grew After the Speech

The Securities and Exchange Commission alleged that a senior executive approved a ¥500,000 speaking fee for an official attending an August 2017 resort symposium in Okinawa. After the speech, consultants learned that the official would soon become the vice minister in charge of integrated resorts. The executive then approved a larger ¥2 million fee, although the official had not requested more money.

According to the commission’s order, the money went through a consultant’s company and then to a company controlled or owned by the official. 500.com recorded the payment as an advisory expense. The speech was already over. What had changed was the speaker’s power over the business 500.com wanted.

A Research Contract That Became Cash

The commission’s order traced the rush to move cash to Japan’s snap election, called in September 2017 for the following month. It alleged that 500.com wanted to keep influential politicians on its side and approved hand-carried cash after determining that direct campaign donations were illegal.

Under its criminal deferred prosecution agreement, BIT Mining admitted using a sham consulting contract to fund bribes through a Singapore subsidiary of a Japanese marketing and media company. A consultant working for 500.com was also a director and senior manager of that business. The supposed assignment was to produce a report about integrated resorts. The report was never created or delivered.

In September 2017, 500.com wired approximately $233,715 through a bank account in the United States to the consulting company. The company’s admitted account follows the money into an account owned by an associate of another consultant. That consultant then withdrew the money in Hong Kong and converted it into Japanese yen, before joining another consultant to carry cash to lawmakers’ offices in Japan. The intended return was access to nonpublic information and influence over the resort bidding process.

The messages connected the transfer to the people receiving the money. According to the admitted statement of facts, the chief executive asked about the amounts, received screenshots breaking down intended bribes and recipients, and approved the arrangement. The contract supplied the business explanation for withdrawing company funds. The messages supplied the actual explanation.

Gambling Chips on a Gambling-Addiction Trip

The commission alleged that a December 2017 trip to Shenzhen and Macau was presented as travel to a seminar about managing gambling addiction. In its criminal agreement, BIT Mining admitted that the trip included a short office visit and business presentation, but primarily paid for private-jet travel, gambling chips, luxury goods, meals, sex workers and five-star accommodations, along with cash for Japanese officials. We would call that an extraordinary interpretation of a business seminar.

The company’s admissions describe another layer of concealment after the trip. 500.com issued false invoices to make it appear that officials had reimbursed the company. It neither expected nor received that reimbursement. Someone inside finance could therefore see both the expense and the fictional claim that the company had been paid back.

The same admitted account describes a February 2018 ski trip to Hokkaido for an official, his family and his aide. The chief executive approved expenses including lift tickets, ski equipment, snowmobiles and hot-springs visits. The commission alleged that the trip had no legitimate business purpose and that 500.com recorded its reimbursement as entertainment and travel expenses. The hospitality served the effort to win support for a resort in Hokkaido.

The Invoice Could Pass Without the Work

The Securities and Exchange Commission’s books-and-records and internal-controls allegations reached the point where employees approved and recorded payments. The order said executives could direct staff to pay invoices without documented deliverables. 500.com also failed to verify that consultants used payments for their stated purposes or actually performed services before receiving fees and reimbursements.

That failure extended beyond the consultant who moved the cash. The order identified other consultants paid without documented work. Finance also lacked the market-price comparisons required by the company’s procurement policy. Employees and outside consultants dealing with government officials also lacked anti-bribery training. An approval signature could move the payment through the company while leaving the work supposedly being purchased unexplained.

The false description traveled upward. Under its criminal agreement, BIT Mining admitted recording bribes as legitimate consulting expenses in its consolidated books. It also admitted that the chief executive signed false annual Sarbanes-Oxley certifications in April 2018 and April 2019, saying he had disclosed management fraud to auditors and the board while leaving out the bribes and false records. The subsidiary’s accounts fed into the parent’s financial statements, so the paperwork reached beyond the Japan team.

The money bought official influence. The books described consulting work, and the payment controls let the money leave without anyone having to show that work was done. A person who knows only the invoice or the approval process may still know something central to how the scheme operated.

What the Company Admitted and What the Agencies Alleged

According to the commission’s order, the scheme came to light in late 2019, when 500.com’s offices were raided and Tokyo prosecutors brought bribery charges against consultants and officials. The Securities and Exchange Commission settled its Foreign Corrupt Practices Act case over the bribery, false books and failed controls on November 18, 2024. Separately, BIT Mining’s criminal deferred prosecution agreement contained the admissions about payments and concealment described above.

The company admitted approximately $1.9 million in payments to officials and consultants, knowing that consultant payments would benefit officials at least in part. The commission described approximately $2.5 million in illicit payments, including consulting fees, reimbursements, cash and trips. The civil penalty exceeded either account of the scheme’s payments. In both accounts, the consultant receiving the money was not where it stopped.

The Justice Department also announced an indictment of the former chief executive, alleging that he directed consultants to pay and conceal the bribes. The FBI’s International Corruption Unit investigated, with help from Japanese authorities.

The company’s criminal agreement credited it with ending the intermediary relationships and increasing board oversight of compliance risks and audit findings. Those changes addressed who could keep a consultant on the payroll and how management handled warnings, both things employees may know beyond the approval paperwork.

What an Insider Would Recognize

A consultant’s invoice can be complete while the underlying work is missing. A travel expense can carry a business description while the itinerary tells a different story. In the Securities and Exchange Commission’s case involving Deere & Company, the agency alleged that a purported factory visit by Wirtgen Thailand customers never included a factory:

The 2022 Journal of Forensic and Investigative Accounting paper Fresenius Medical Care: A Case Study on the FCPA found that managers and employees at Fresenius Medical Care circumvented internal controls despite flagged transactions and company policies. Its analysis matters here because a written policy and a flagged payment can coexist with continuing misconduct. We want to understand who could keep a payment moving when the business explanation failed.

For BIT Mining, the payment trail connected the research assignment, the bank transfer, the cash withdrawal and the official’s expected help. Different employees could see different parts: the missing report, the instruction to pay anyway, the travel arrangements or the expense description. Your knowledge of why a transaction happened can explain what a ledger alone cannot.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For foreign-bribery information, we assess the separate SEC whistleblower program with you, where eligible awards range from 10% to 30% of qualifying collected sanctions. We connect the information you hold to the program and foreign-bribery whistleblower lawyers suited to your case.

You Know What the Consultant Actually Did

If you saw research fees paid without research, travel disguised as work or an executive approving payments to reach an official, speak with our whistleblower experts. We build your strongest foreign-bribery whistleblower case around the transactions you understand, bring in foreign-bribery whistleblower lawyers who know how international payments become false company records, and stay beside you throughout.