I think you will be ok. These guys did so many things wrong that nobody could sweep it under the rug. As long as you have your papers in order and follow the law, as unfair as it is, you will be fine. I have been living in my part of Jiangsu and the police don't really care what I do as long as I don't drive a vehicle illegally, work illegally, and the like.
Actually my boss' husband works in the local police and he has not said anything about the six foreign teachers here.