I was in a situation kind of like this. I was brought on to a Canadian company to make and end to end software system for gambling kiosks. They kept on making odd requests of me like being able to reseed random numbers on units until they found a set they liked (our games were deterministic). IE ones that payed out how they want. Also wanted me to not use encryption for various portions of the system that handled money.

Eventually I got a picture of the business where they were defrauding their investors by winning their own games or through exploiting purposeful holes in the system. Eventually I just delivered them a functioning and secure system. Refused to go down to the Dominican to install it (Since they had considerable pull down there) and walked away. It was really the first large project I had done and walking away hurt me considerably. But it was the right thing to do.

Those guys are in jail now and the investors pulled the plug. So at least I have some vague sense of Schadenfreude over the whole thing.

Unfortunately ethical software developer isn't exactly a winning eye popping line item on the resume.