Attorney Shao Shiwei | Success Story | Can a Programmer Charged with Operating a Casino Involving Virtual Assets Still Hope for a Suspended Sentence After Arrest?

A Case Involving a Programmer Allegedly Operating a Casino Through “Virtual Currency Payment and Settlement”

Several months ago, I took on a case of operating a casino: the client was a programmer accused of providing virtual currency payment and settlement services for multiple overseas gambling websites, allegedly constituting the crime of operating a casino.

According to the accusations by the public security organs, over the past two years, the programmer helped multiple gambling platforms settle gambling funds totaling more than 400 million USDT, equivalent to approximately RMB 2.7 billion; his personal illegal gains amounted to more than 900,000 USDT, approximately RMB 6 million.

Under Article 303 of the Criminal Law regarding the crime of operating a casino, if the cumulative amount of gambling funds reaches RMB 300,000, or the amount of illegal gains exceeds RMB 30,000, it constitutes “serious circumstances,” which typically warrants a fixed-term imprisonment of not less than five years and not more than ten years.

In the face of a case with clear legal characterization, unambiguous evidence, and a substantial amount involved, what further actions can defense counsel take? Where exactly does the scope for defense lie?

An Evidentiary Impasse of "No Living Witness to Corroborate"

When I took over this case, the public security investigation phase had already concluded, the evidence on record had been fully collected, and the case had been transferred to the People's Procuratorate for review and prosecution.

This article focuses on the communication efforts undertaken by defense counsel during the procuratorial stage. Since the implementation of the plea leniency system, the sentencing recommendations provided by prosecutors play a crucial role in determining the final sentence imposed by the court.

Through preliminary communications with the client's family, I learned that the client actually had two other partners in this matter. The three of them operated as a studio to liaise externally with gambling platforms and independently undertake business. However, one partner had passed away, and the other disappeared without a trace after the incident came to light. The client was arrested on the spot by police officers who had been conducting surveillance at the airport upon his return to China.

From the perspective of defense counsel, what were the respective roles of the three individuals? How was the profit distribution agreed upon regarding the more than 900,000 USDT? These factual issues are critical. The reason is that the client was caught off guard and arrested on the spot at the airport, thus precluding any claim of voluntary surrender. Apart from conventional defense points concerning the amount of gambling funds and illicit profits, securing recognition as an accessory offender is the only viable path to potentially reducing the sentence to under five years.

Yet this presents a case characterized by the evidentiary impasse of "no living witness to corroborate,"To quote the handling officer's exact words during the interrogation of the client: "Who knows whether what you are saying is true? All we know is that you structured the contract logic, and you were the one communicating with the gambling platform via the Telegram group. You claim to have two partners, but Partner A has never been seen, and Partner B is long dead. So, did you do it all yourself? No matter how we investigate, only you appear!"

To be honest, even now, I do not know whether the other two partners truly existed. However, for the purposes of defense work, what the absolute truth is matters less than how to leverage the existing evidence to seek a lighter sentence for the client.

Can an analysis of prior similar cases in the local jurisdiction assist in the present case?

Beyond the statutory provisions themselves, local judicial practice in prior judgments serves as an important reference for constructing defense strategies. As discussed in my previous article, "Different Judgments for Similar Cases? A Study on 'Territorial Jurisdiction' Issues in Criminal CasesAs mentioned in the chart below, even for the same criminal charge, it is not uncommon to encounter disparate judgments in similar cases across different regions in judicial practice.

I conducted an in-depth search for cases involving the crime of operating a casino combined with virtual currency settlement in this region in recent years, but the results were not optimistic. For example:

Furthermore, based on related cases handled by our team, some case-handling personnel consider that engaging in virtual currency transactions constitutes an aggravating circumstance that courts internally reference when determining heavier penalties.

After conducting in-depth research on relevant local cases, I became more aware that in the judicial practice of this region, it is basically difficult to avoid actual imprisonment in cases of operating a casino. Even more discouragingly, given the existing evidence, it is not possible to mount a defense based on the crime of aiding information network criminal activities, because the client was not an employee, and his subjective knowledge and intent to cooperate were evident, meaning he did not hold an auxiliary or subordinate position.

With tight deadlines and heavy workload, by the time I received the case file, more than half of the period for examination and prosecution had already elapsed. There was no time for further deliberation; I started working immediately, beginning with the first step of reviewing the case file.

Two Core Difficulties in the Case

It took me a full five days to conduct a preliminary review of nearly one thousand pages of case files and dozens of gigabytes of electronic data.

I identified two challenging aspects of this case:

First, as mentioned above, the co-defendants involved in the case are deceased and thus unable to provide testimony. How, then, can the defendant’s role and status within the syndicate be determined in this case? Furthermore, based on the case description by the public security organs in the case file, there is no mention whatsoever of principal or accessory offenders, nor of other team members; all implicated acts are attributed solely to the defendant: liaising with gambling platforms, constructing contract logic, communicating via Telegram, and controlling wallet addresses were all performed by the defendant. Moreover, no staff members from the gambling website have been brought to justice. This further intensifies the impression that the defendant acted alone.

The other category comprises on-chain transaction data. Such data is inherently public and objective. Even if the public security organs made certain omissions in their statistical calculations, how much could realistically be deducted from the total gambling funds of RMB 2.7 billion and the illicit profits exceeding RMB 6 million?

Could we then recommend the continued arrest of other partners or platform personnel? Such recommendations can certainly be made. However, these individuals possess strong counter-investigation capabilities, and it is highly probable that they are not within China. Under the current criminal investigation mechanism, recommendations involving cross-border evidence collection and extraterritorial arrests have virtually no practical feasibility. Public security organs generally do not initiate complex international cooperation procedures for such matters.

Therefore, I needed to carefully consider my communication strategy: what exactly should I say to the prosecutor, and how should I say it? How could I negotiate a reduced sentence for my client?

How should one communicate? Is an aggressive, confrontational approach effective?

In practice, there is a category of lawyers whose case-handling style is referred to within the industry as the "confrontational school." When defending clients, these lawyers often exhibit strong adversarial tendencies. They typically adopt an uncompromising stance—challenging authorities, refusing to yield, and persisting relentlessly until their objectives are met—to vigorously argue legal issues in the case. They engage in head-to-head confrontations with case-handling personnel and may even expose case-related issues online, leveraging public opinion pressure to steer the case in a different direction.

This style may indeed have some impact in high-profile innocence-defense cases that involve significant social influence and substantial room for controversy. However, in cases like the present one, where the legal characterization is already largely clear and the focal point of dispute centers on the sentencing range, such confrontational tactics are often not only ineffective but may also prove counterproductive. From the perspective of judicial authorities, this may be perceived as an improper attitude toward admitting guilt and poor communication, ultimately resulting in a heavier sentence. We have frequently encountered such outcomes in our practice.

Does this mean that in cases with clear legal characterization, such as the present one, the only option is to passively follow procedural steps and plead guilty under the leniency system for admission of guilt and acceptance of punishment? Certainly not. Even in cases with clear legal characterization, we can still employ effective mitigation strategies to seek lighter treatment for our clients.

Of course, the specific formulation of a mitigation defense strategy depends on the particulars of each case and requires individualized analysis. Beyond examining the evidence itself, it is necessary to comprehensively consider the stage of the proceedings, the individual personality and working style of the case-handling officer, as well as their understanding of legal provisions and overall assessment of the factual circumstances. At times, the same case may take entirely different trajectories depending on the hands of different case-handling personnel.

Initial Engagement with the Prosecutor

One morning, I scheduled a meeting with the prosecutor handling the case. I arrived early and waited outside the procuratorate. However, upon entering his office, I was immediately struck by the imposing presence of stacks of case files piled on his desk.

He appeared exceptionally busy. His landline phone rang continuously; he would hang up only for it to ring again immediately, and he would answer each call in turn. I sat silently in the chair opposite him, waiting for an appropriate opportunity to interject.

When the ringing finally ceased, he looked up at me and said succinctly, "There is little controversy in this case. You should proceed with the plea of guilty and acceptance of punishment as soon as possible; the timing is about right. We have a heavy caseload, and the procuratorate wishes to expedite the indictment."

I seized the opportunity to raise my first question: “With respect to sentencing, what considerations do you currently have?”

He flipped through the case file and said with some impatience: “He claims the code was written by two partners? B has been dead for years—how could B have written it? You have reviewed the case file as well; A left no trace whatsoever in this case. It is not even clear whether such a person exists; he likely fabricated the story. Given the substantial amount involved, and by reference to other cases we have handled, the sentence would be at least seven to eight years.”

In that moment, I could discern a clear predisposition in his tone regarding the legal characterization of the conduct—his view of the facts aligned broadly with that of the public security organs.

Frankly speaking, based solely on the case file, that assessment is indeed accurate:

It was he who interfaced with the gambling platform;

It was he who structured the smart-contract logic;

It was he who controlled the wallet addresses (and they were not multi-signature wallets);

In the Telegram chat records, only he communicated with the platform.

Although he stated that he received only a fixed salary, he also admitted that no profit distributions had been made over the years, and he could not even clarify who received what amounts;

Moreover, in the initial several interrogation transcripts, he did not mention the so-called “partners” at all.

Under these circumstances—leaving aside the prosecutor—how would any ordinary person, influenced by first impressions, perceive the matter?

How can “effective communication” be achieved?

In fact, before meeting with the prosecutor, I had repeatedly reviewed all key evidentiary points in the case—indeed, I approached the meeting with clear communication objectives and prepared materials. His initial response was not unexpected.

I then began asking for his views on the case.

At first, the prosecutor did not pay much attention to my opinions. After all, in cases characterized by a guilty plea and acceptance of punishment coupled with clear data, handling personnel tend to instinctively proceed through the routine process.

But immediately afterward, I said, “If the Procuratorate does not return the case for supplementary investigation and instead proceeds to indict it as is, do you think the judge would require the Procuratorate to continue supplementing the evidence?” That single remark clearly gave him pause; he promptly set aside his current work, took out a notebook, and began taking notes.

Although the legal characterization of this case appeared uncontroversial on its face, there were numerous substantive and procedural deficiencies—for example, the judicial disposition and liquidation process for virtual assets, the methods for calculating the amount involved, and the basis for determination. Moreover, readily designating the client as a principal offender could give rise to certain “aftereffects.” If defense counsel insists on returning the case for supplementary investigation, it places considerable pressure on the prosecutor, especially one handling a crypto-related case for the first time, because the obtainable evidence has already been collected. Even if the case were returned to the public security organs, it would be difficult to procure any more compelling evidence in the circumstances of this case.

In short, I observed the prosecutor’s expression growing increasingly grave as he took notes, which indicated that my opinions had garnered his attention. After two to three hours of discussion that morning, he concluded, “Alright, your points do have merit. I have recorded them. I need to discuss these matters further with my superiors, and I also need to verify certain details with the public security organs before I can provide you with a response.”

I knew that, with this visit, I had achieved the objective of this communication.

In the following days, I did not cease my efforts. I maintained ongoing online communications with the prosecutor, repeatedly discussing and addressing each key issue in the case item by item.

As desired

Ultimately, the sentencing recommendation in this case—initially stated by the prosecutor as “at least seven to eight years”—was gradually reduced.

First, we persuaded him to lower the sentencing recommendation to under five years,

and then further negotiated it down to three years of actual imprisonment,

Next came the prospect of a three-year prison sentence with a five-year probation period,

Ultimately, we achieved a result that was truly satisfactory both to me and to the client:

a two-year fixed-term imprisonment, suspended for three years.

To laypersons, this might seem like a miracle.

From my perspective, each adjustment, every instance of persuasion, and the management of each communication rhythm were steadily advancing in accordance with my work plan. Due to space constraints, I will share my case-handling strategy and the details of communications with the prosecutor at a later opportunity.

When the outcome was finally confirmed over the phone with the prosecutor, the prosecutor said:

To be honest, in my eight years of practice, this is the first time I have heard such remarks from a prosecutor. After all, as insiders know, although we speak of a “professional community,” in how many cases do the handling officials and defense counsel genuinely respect and recognize each other’s work?

The client was also highly satisfied with the final outcome, and thus smoothly signed the affidavit admitting guilt and accepting punishment, after which the case was transferred to the court. However, the proceedings at the court stage did not proceed without obstacles.

Shortly after the case was filed with the court, my partner, Attorney Ding, received a call from the judge—

Hearing this, we felt a surge of concern, given that the Procuratorate’s sentencing recommendation is merely advisory, and the ultimate authority to decide rests with the judge.

The twists and turns in between will not be detailed here. In short, although the situation was precarious, it ultimately did not result in disaster. The court adopted the sentencing recommendation submitted by the procuratorate, and the judgment has been formally rendered:

A fixed-term imprisonment of two years, with a three-year probation period.

On a side note, the presiding judge was quite interesting. Afterward, he quietly asked us, “How did you manage to reach an agreement with the prosecutors? They usually don’t even pay attention to us.” (These were the judge’s exact words.)

Case Review: Finding Hope in the Cracks

I often say that the work of criminal defense lawyers frequently involves finding hope in the cracks.

Behind the favorable outcome of this case lies a meticulously analyzed litigation strategy and effective communication with the case-handling personnel at every step. Each stage of the work required precise timing and careful calibration.

The nature of the offense in this case was clearly defined, the amount involved was substantial, and the client voluntarily pleaded guilty, expressing no objection to the facts or to the amounts calculated by the investigating authorities. It appeared to be a case with “no room for maneuver.” Nevertheless, I have always believed that no matter how difficult or complex a case may be, as long as a final judgment has not been rendered, there is always space for communication and adjustment. The issue is not about denying anything, but rather about identifying breakthrough points and, within the existing evidentiary framework, encouraging the case-handling authorities to make determinations more favorable to the client.

The breakthrough in this case did not involve challenging the basic facts underlying the clearly defined classification of the offense. Instead, it required accurately identifying the potential concerns of the case-handling personnel, pinpointing the “risks they could least accept,” and then leveraging those risks to promote adjustments in how the case was handled.

Throughout the defense process, we neither evaded the seriousness of the case nor blindly challenged its legal classification. Rather, we designed our strategy from the perspective of “ensuring the case proceeds smoothly through procedural stages while bringing the punishment within a reasonable range.” In summary, fully putting ourselves in the shoes of the case-handling personnel and presenting corresponding defense arguments accordingly—thereby securing a favorable outcome for the client—was the key factor contributing to the successful result in this case.

Gratitude for the Trust of Our Peers

This case came to me through a referral from Attorney Ding Yue of Shanghai Shuke Law Firm, who introduced the client’s family to me.

Frankly speaking, over my many years of practice, a significant number of my cases have come through referrals from fellow practitioners. However, such trust among peers is not easily earned, as a referral itself constitutes a form of professional endorsement. If the referred attorney mishandles the case, the referring attorney’s reputation suffers as well. This is particularly true in cases like this one, which involved novel and complex issues and a substantial amount in dispute, making it appear daunting to any lawyer.

Attorney Dante did not hesitate for a moment and promptly recommended me to the family. She told them, “Attorney Shao handles a significant number of cases involving virtual assets and those related to operating casinos, and thus possesses relatively extensive experience. I hope he can join this case.”

I was genuinely moved upon hearing this. We had not known each other previously, yet she was willing to sincerely recommend me to the family without any prior personal relationship. This trust, at its core, reflects placing the client’s interests first.

Throughout the handling of the case, our collaboration was seamless. Whether in discussing case strategy, communicating with the family, or preparing materials, we worked together perfectly. Meanwhile, I highly appreciate the professionalism she demonstrated throughout the case, as well as her sincerity, kindness, and sense of responsibility toward the client and his family.

Postscript

After completing this article, I wish to add a few remarks. While they may not be directly related to the case itself, they pertain to the frequently raised question of why lawyers should defend “bad people.”

Some may argue, “What is there to defend in such cases? Gambling has ruined countless families; such individuals deserve heavy sentences! You lawyers are merely helping wrongdoers evade conviction, turning black into white!”

However, through handling hundreds of criminal cases of varying scales, I have come to realize that, as criminal defense attorneys, what we face are never abstract “charges,” but concrete individuals. Behind each individual stands one or even several families.

Furthermore, even if an individual’s conduct is ultimately characterized as criminal, there are specific reasons behind their actions from their own perspective.

In this case, the client had been working abroad for many years to make a living. Given his prior experience in trading crypto assets and his professional background as a programmer skilled in coding, he was introduced to engage in work described as “assisting the platform with fund settlement.” This decision was undoubtedly erroneous, but his original intention was simply to earn more money to provide a better life for his family.

Although he indeed earned a substantial amount from this activity over the past two years, he maintained a frugal lifestyle. This explains why the funds in his exchange account remained largely untouched. Apart from small withdrawals made when necessary to send living expenses to his family in China, he saved the remainder for his child’s future education and living costs. Aware that his illness might prevent him from living until his child enters university, he strove to earn money to leave more for his child while he was still alive.

Yes, he did violate the law, but he has already borne the corresponding consequences: he was detained for more than half a year and has paid both the disgorgement of illegal gains and the fines. However, if he were to remain in long-term detention in the future, his entire family, including the elderly and children, would fall into deeper hardship.

We by no means deny the harmfulness of criminal conduct.

Yet, in many cases, lawyers are not merely defending an accused individual,

but also salvaging a family on the verge of collapse.

This, perhaps, is one of the very reasons for the existence of criminal defense.