Ex-Microsoft engineer jailed for defrauding company of $10 million and buying lakefront house and a Tesla – Times of India
A US district court in Seattle sentenced a former Microsoft engineer to 9 months in prison for his attempt to defraud the company of $10 million. According to an official press release issued by Internal Revenue Services, Volodymyr Kvashuk, a Ukrainian citizen living in Washington, worked first as a contractor at Microsoft and then as an employee from August 2016 until he was fired in June 2018.
It was in February 2020, Kvashuk was convicted by a jury of five counts of wire fraud, six counts of money laundering, two counts of aggravated identity theft, two counts of filing false tax returns, and one count each of mail fraud, access device fraud, and access to a protected computer in furtherance of fraud.
According to records filed in the case and testimony at trial, Kvashuk was involved in the testing of Microsoft’s online retail sales platform and used that testing access to steal “currency stored value” (CSV) such as digital gift cards. Kvashuk resold the value on the internet, using the proceeds to purchase a $1.6 million dollar lakefront home and a $160,000 Tesla vehicle.
Initially, he stole smaller amounts totaling about $12,000 in value using his own account access. As the thefts escalated into millions of dollars of value, he used test email accounts associated with other employees. Kvashuk, a knowledgeable software developer, attempted to mask digital evidence that would trace the fraud and the internet sales back to him.
He used a bitcoin “mixing” service in an attempt to hide the source of the funds ultimately passing into his bank account. In all, over the seven months of Kvashuk’s illegal activity, approximately $2.8 million in bitcoin were transferred to his bank and investment accounts. He also filed fake tax return forms, claiming the bitcoin had been a gift from a relative.
“Stealing from your employer is bad enough, but stealing and making it appear that your colleagues are to blame widens the damage beyond dollars and cents,” said US Attorney Moran.
Kvashuk testified at trial that he did not intend to defraud Microsoft. He claimed to be working on a special project to benefit the company. The jury deliberated about five hours following a five-day jury trial before returning the guilty verdicts.
“The Volodymyr Kvashuk trial marked a big win for IRS-CI and the federal cybercrimes team. Kvashuk’s criminal acts of stealing from Microsoft, and subsequent filing false tax returns, is the nation’s first Bitcoin case that has a tax component to it,” said IRS-CI Special Agent in Charge Ryan L Korner in the press release.