A former Microsoft worker was sentenced to nine years in prison Monday for using the company’s online retail sales platform and stealing more than $10 million in digital currency, which was then resold for cash and used for lavish spending, prosecutors said.
Volodymyr Kvashuk, a Ukrainian citizen living in Washington state, had been helping Microsoft test its online retail platform first as a contractor and then an employee in August 2016. The 26-year-old had worked for more than two years until he was fired in June 2018, according to prosecutors.
Prosecutors said Kvashuk stole digital gift cards that could be used on Microsoft products or video-game credits, which were then resold and used on personal goods, such as a $1.6 million lakefront home and a Tesla, which was valued at $160,000.
The ex-Microsoft software engineer had stolen “smaller amounts” of around $12,000, according to prosecutors, until he expanded his scheme and stole millions by using phony email accounts that were linked to other Microsoft employees, prosecutors said.
In February, a federal jury convicted Kvashuk of tax, money laundering and fraud charges. A judged sentenced Kvashuk to nine years in prison Monday and ordered him to pay more than $8.3 million in restitution. He could also be deported following his prison term.
“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,” U.S. Attorney Brian Moran said in a news release. “This case required sophisticated, technological skills to investigate and prosecute, and I am pleased that our law enforcement partners and the U.S. Attorney’s Office have the skill sets needed to bring such offenders to justice.”
Ryan L. Korner, IRS-CI Special Agent in Charge, said that the Kvashuk’s trail marked a “big win” for the IRS in what is the Bitcoin case in the country.
“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,” he said. “Simply put, today’s sentencing proves you cannot steal money via the Internet and think that Bitcoin is going to hide your criminal behaviors. Our complex team of cybercrimes experts with the assistance of IRS-CI’s Cyber Crimes Unit will hunt you down and hold you accountable for your wrongdoings.”
Kvashuk testified at trial that he did not intend to defraud Microsoft and that he was working on a special project to help the company.