Former Microsoft engineer sentenced to 9 years for fraud

A former Microsoft engineer was sentenced to nine years in prison in a Seattle federal court on Monday for defrauding the million-dollar tech giant. Volodymyr Kvashuk, 26, has racked up 18 federal crimes related to his scheme to defraud Microsoft of more than $ 10 million, according to the US Department of Justice. He was also ordered to pay over $ 8 million in restitution.

Kvashuk, a Ukrainian citizen living in Renton, Washington, started as an entrepreneur and then worked as an employee at Microsoft from August 2016 until June 2018, when he was laid off. In February, he was “found guilty 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 income tax returns and one count each of mail fraud, access device fraud, and access to a protected computer in pursuit of fraud, ”according to the Justice Department.

“Stealing from your employer is bad enough, but stealing and making it look like your coworkers are to blame expands the damage beyond dollars and cents,” US attorney Brian T. Moran said in a statement. “This case required sophisticated technological skills to investigate and prosecute.”

Kvashuk was tasked with testing Microsoft’s online retail platform and used that access to steal value stored in currency, like digital gift cards. He then sold that stock online, eventually using his earnings to buy a $ 1.6 million lakeside house and a $ 160,000 Tesla.

He started by stealing smaller sums worth a total of around $ 12,000 using his own account, the Justice Department said. Then, as the thefts piled up, Kvashuk started using test email accounts linked to other employees. He worked to cover his tracks by using a bitcoin “mix” service that would hide the source of the funds ending up in his bank account. In seven months, about $ 2.8 million in bitcoin had been transferred to his bank and investment accounts. Kvashuk filed fake tax return forms and claimed bitcoin was a giveaway.

“Kvashuk’s criminal acts of stealing from Microsoft and filing false income tax returns is the country’s first Bitcoin case to have a tax component,” said Ryan L. Korner, IRS Special Agent for Criminal Investigations , in a press release. “Today’s conviction proves that you cannot steal money over the internet and that you think Bitcoin is going to hide your criminal behavior.”