Earlier this week, former Microsoft engineer Volodymyr Kvashuk was convicted of stealing $10 million worth of digital currency from the company.
Over the course of a five-day trial held within the US District Court in Seattle, Kvashuk was eventually found guilty of 18 federal felonies related to his fraudulent scheme by a jury after five hours of deliberation. Kvashuk faces up to 20 years in prison on five counts of wire fraud, six counts of money laundering, two counts of aggravated identity theft and, two counts of filing computer in furtherance of the fraud.
Back in July of 2019, Kvashuk was officially charged with Mail Fraud for Scheme to Steal Digital Value Such as Gifts Cards by the Department of Justice’s attorney’s office of the Western District of Washington.
More specifically, Kvashuk was caught illegally using a testing account with Microsoft’s online sales platform to embezzle more than $10 million in digital currency in May of 2018. Kvashuk then went on to reuse his illegally acquired digital currency to purchase a $1.6 million lakefront home and a $160,000 Tesla.
According to the criminal complaint, KVASHUK was to use a test Microsoft store account to access the company’s online sales platform and simulate the experience of customers making purchases. The system was set up to ensure no physical products ever shipped.
The testing program was not supposed to involve purchases of ‘currency stored value’ (CSV) such as gift cards. KVASHUK used test accounts to purchase CSV, and then resold some or all of it on Internet reseller websites. Initially, he started stealing smaller amounts of about $10,000 in value using his own account access. As the thefts escalated into millions of dollars of value, KVASHUK 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 was transferred to his bank accounts.
Despite Kvashuk pleading with the court that he “did not intend to defraud Microsoft,” and that he was “working on a special project to benefit the company,” assistant US attorney Siddharth Velamoor put an emphatic punctuation on the case with his closing argument, stating Kvashuk “hid behind his colleagues’ names…. dripping fraud and deceit every step of the way…. This is a simple case… any way you look at it this is a crime of greed.”
