I think this 'sting' was a terrible idea as explained above. That said, what you're saying here is typical for any kind of 'sting' operation, e.g., drugs, money laundering, guns with controlled coverage unlike here, etc. It is also legal for law enforcement to conduct 'sting' operations and it's not considered to be engaging or tolerating criminal activity. For example, a cop is not deemed to be a drug dealer who violated drug laws just because he sold some dope to a distributor as part of a 'sting.'