Three things:
1) When you conquer all your enemy's core worlds and they resign, their colonies become pirate-owned colonies. Because the Xeloxi are allied with the pirates, they can't invade these planets anymore.
I imagine this would also be a problem for anyone who takes the ideology point in Criminal Ties.
2) We're told at the start that the Xeloxi can unlock special improvements with increased levels of crime, but what does that mean? You've got the Smuggler's Port, but you can only build one of those. Are there other improvements you get with even higher crime? Is there some technology you need to unlock these? I feel like it should be spelled out exactly what the rewards and requirements are, so that I have some idea whether to increase crime or not.
3) The Look the Other Way policy spreads crime through trade routes, but as far as I can tell there isn't a way to determine how much crime you are spreading. Does it go up the more crime you have?