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A former Microsoft software engineer from Ukraine has been sentenced to nine years in prison for stealing more than $ 10 million in store credit from Microsoft’s online store. From 2016 to 2018, Volodymyr Kvashuk worked for Microsoft as a tester, placing bogus orders online to make sure everything was working fine.
The software automatically prevented physical products from being sent to testers like Kvashuk. But in a crucial oversight, he didn’t block the purchase of virtual gift cards. So, 26-year-old Kvashuk found he could use his test account to buy real store credit, then use the credit to buy real goods.
At first, Kvashuk bought an Office subscription and a few graphics cards. But when no one objected to these little purchases, he got much bolder. In late 2017 and early 2018, he stole millions of dollars in Microsoft Store credit and resold it online for bitcoin, which he then cashed using Coinbase.
Prosecutors say he made at least $ 2.8 million, which he used to buy a $ 160,000 Tesla and a $ 1.6 million waterfront house (his proceeds were lower to the value of the stolen credit because it had to sell at a significant discount).
Kvashuk made little effort to cover his tracks for his first purchases. But as his flights increased, he took more precautions. He used test accounts that had been created by colleagues for subsequent flights. This was easily done because the testers kept track of the test account credentials in a shared online document. He used disposable email addresses and started using a virtual private network service.
Before cashing in the bitcoins, he sent them to a mixing service in an attempt to hide their origins. Kvashuk reported the bitcoin windfall to the IRS, but claimed the bitcoin was a gift from his father.
The case of government
But the government complaint included a number of pieces of evidence linking Kvashuk to the crime.
He sometimes used the same VPN connection – and therefore the same IP address – to access different accounts, allowing investigators to establish connections between his known accounts and those used for subsequent thefts. The devices’ fingerprinting techniques also provided circumstantial evidence linking Kvashuk to the larger heists.
The federal government has also argued that the timing of Kvashuk’s sudden bitcoin wealth was suspect. “The value of bitcoin deposits in Kvashuk’s Coinbase account was generally correlated with the value of the purchase and exchange. [Microsoft credit]”, Argued the government.
A jury found the government’s arguments convincing and convicted Kvashuk on several counts in February.
“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 Moran said in a press release. Kvashuk was found guilty 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 counts of count of mail fraud, access device fraud and secure computer access in pursuit of fraud, ”the government wrote.
Kvashuk has been ordered to pay $ 8.3 million in restitution, although it seems unlikely he will ever be able to do so. The government says he could be deported after serving his prison sentence.
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