A former Microsoft engineer was sentenced Monday to nine years in prison for a scheme to defraud the Redmond company of more than $10 million, the U.S. Attorney’s Office said.
Prosecutors said Volodymyr Kvashuk, a 26-year-old Ukrainian citizen living in Renton, used his role as a tester of Microsoft’s online retail platform to steal what’s known as “currency stored value,” including digital gift cards.
Kvashuk then resold the value on the web and used the proceeds to buy a $1.6 million lakefront home and a $160,000 Tesla.
Kvashuk was convicted in February of 18 federal felonies, including 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 a fraud.
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Kvashuk first worked as a contractor for Microsoft and then as an employee from August 2016 until he was fired in June 2018. Prosecutors said he started out using his own account to steal “smaller amounts” from Microsoft, which totaled about $12,000.
Prosecutors said he eventually graduated to stealing millions of dollars, and his scheme became more sophisticated, using test email accounts associated with other Microsoft employees, which cast them under suspicion.
Kvashuk, whom prosecutors said is a “knowledgeable software developer,” tried to cover his digital trail using a bitcoin “mixing” service to hide the source of the funds passing into his bank account.
Over seven months, Kvashuk transferred about $2.8 million in bitcoin to his bank and investment accounts, prosecutors, said in a statement. He then filed a fake tax return, claiming the bitcoin had been gifted by 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,” U.S. Attorney Brian T. Moran said in the statement.
Kvashuk testified at trial that he did not intend to defraud Microsoft but claimed he was working on a special project to benefit the company. He was ordered to pay more than $8.3 million in restitution and may be deported following his prison term.
The case was investigated by the Internal Revenue Service Criminal Investigation, Western Cyber Crimes Unit and the U.S. Secret Service.
