I don't think Yue Qingyuan believes that Shen Jiu can do no wrong -- I think Yue Qingyuan is actually far too accustomed with how much wrong he can do and therefore believes that what Shen Jiu does is wrong even if there isn't any proof (brothels + Liu Qingge).
Mostly I believe this due to the fact that Yue Qingyuan is overrun with guilt for not being there for Shen Jiu that he accepts that Shen Jiu turned out horrible because of him. And instead of correcting the behavior or doing something to stop it, he welcomes it as his own punishment. This is probably a massive part on why Yue Qingyuan is so quick to defend him, but so slow to believe him.
