[2020-11-10] Ex-Microsoft Dev Gets 9 Years in Prison Over $10M Theft

[NotATether]

Source: https://www.coindesk.com/ex-microsoft-employee-prison-bitcoin-mixing-crime

This ex-employee managed to get a lot of gift cards that haven't been sold yet and exchanged them for bitcoin. First he exchanged hundreds of thousands in gift cards to bitcoins with his own corporate email. Then he used other employees’ emails to gain millions more in gift cards. Then he mixed all the bitcoins using a mixer (not sure which one) to hide his tracks but it didn’t matter because Microsoft eventually found a large number of missing gift cards under his name.

He got 9 years in prison today.

Ex-Microsoft Dev Gets 9 Years in Prison Over $10M Theft Involving Bitcoin Mixing

A former software engineer at Microsoft received a nine-year prison sentence Monday for an elaborate multi-million dollar criminal scheme involving bitcoin and digital gift cards.

Ukrainian citizen Volodymyr Kvashuk, 26, was sentenced in the U.S. District Court in Seattle for 18 federal felonies related to his scheme to defraud Microsoft of more than $10 million. This marks the first case of its kind in the U.S., according to a press release by the Department of Justice.

Kvashuk was involved in the testing of an online retail sales platform for Microsoft from August 2016 until he was fired in June 2018. He had used his employee access to steal “currency stored value” (CSV), namely digital gift cards. He then resold that value online and used the proceeds to fund a lavish lifestyle including a $1.6 million lakefront home and a $160,000 Tesla car.

What initially began as a small sum of $12,000 in CSV using his own email account access Kvashuk eventually moved to email accounts belonging to other employees in order to mask the growing thefts. Kvashuk then employed a bitcoin (BTC, -0.60%) mixing service, attempting to conceal the source of funds arriving in his bank account.

“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,” said Brian Moran, a U.S. attorney for the Western District of Washington.

Over a period of seven months, Kvashuk’s illegal activity saw a total of $2.8 million in bitcoin transferred to his bank and investment accounts. He then filed fake tax return forms claiming the bitcoin had been a gift from a relative, according to the department’s statement and court records.

Kvashuk must now pay more than $8.3 million in restitution – the value of CSV redeemed by third parties who had purchased stolen Microsoft gift cards. The software giant was able to block a further $1.8 million in CSV redemptions totaling more than $10.1 million, according to a court memorandum filed on Nov. 2 in the Western District of Washington.

Once again guys, this only underscores the warning of don’t buy gift cards from newbies on Digital Goods board. You might unknowingly be helping them launder illegal money. Only buy gift cards from trusted users.

If you buy stolen gift cards they can be invalidated at any time by the storefront.

[Lucius]

What a loser! It is not at all clear to me how people are employed in such large companies given that they have (at least in this case) a very low IQ. First he stole something using his data, and then he mixed Bitcoin in hopes that it would protect him, really ingenious

I think 9 years is an appropriate sentence in this case, provided it is served in full. Although when you look at how intelligent this guy is, I’d bet this isn’t his last trip to jail.

[hatshepsut93]

Such a stupid thing to do, there's no way you don't get caught if you use your company credential to steal from them, it all stays in their database forever, and sooner or later someone is going to figure it out. His only choice was to flee the country and live somewhere remote and under a new name, hoping that you won't get tracked, which is still a stupid thing to do. The fact that he used Bitcoin and mixing doesn't change anything, it's not a method to cover your tracks in cases like this.

[passwordnow]

He's aware of the use of mixer but if used his corporate details for doing theft. I don't know what to say if he's brilliant as he knew how to use a mixer.
Yet, he didn't realized that doing illegal things using his corporate email will still allow him to be trackable.

[hv_]

There is a reason why Bitcoin is a transparent audit ledger: Get rid of darks and crime - just dont use it for shitty things

[Mahanton]

There is a reason why Bitcoin is a transparent audit ledger: Get rid of darks and crime - just dont use it for shitty things

People that do have shitty minds will make it use for shitty things which isnt surprising.

On the situation on why the heck that ex-dev do think that he made up mixing with those bitcoin without even thinking that microsoft already known his name in the first place.

He didnt make any plan on covering up his mess? thats why kind too dumb of a plan. 

[hv_]

There is a reason why Bitcoin is a transparent audit ledger: Get rid of darks and crime - just dont use it for shitty things

People that do have shitty minds will make it use for shitty things which isnt surprising.

On the situation on why the heck that ex-dev do think that he made up mixing with those bitcoin without even thinking that microsoft already known his name in the first place.

He didnt make any plan on covering up his mess? thats why kind too dumb of a plan. 

It is all about the marketing / selling to noobs that Bitcoin work anonymous, helps for the shit (and adding 'privacy features' - inviting more shit ...)

[stompix]

What a loser! It is not at all clear to me how people are employed in such large companies given that they have (at least in this case) a very low IQ. First he stole something using his data, and then he mixed Bitcoin in hopes that it would protect him, really ingenious

I tried to find him an excuse for acting like that but the only way he could have thought this would shield him was by hiding the part he has stolen using his colleague's credentials. So, if he had gone down he would have been only accused of the $12k he stole using his own account and the rest of the money would be untraceable....till...he sent 10 million to his own banking account. And he filled in fake tax forms!!!!!!!!!!

The only explanation for his actions that holds any water is that once he saw he can make millions with this scheme he completely lost his head and went full counter-productive paranoic.

During the trial, Kvashuk denied any intention to defraud Microsoft; instead, he said he was "working on a special project to benefit the company."

Great project Sir, when bounty? 

Once again guys, this only underscores the warning of don’t buy gift cards from newbies on Digital Goods board.

I wonder if he was active around here too

[pixie85]

It's even worse than that. He stole it using his own account, mixed, sold and moved the money to his personal bank account.

Even if the company missed the theft or failed to find who was selling the cards they'd sooner or later notice that a low level employee had millions of dollars moved to his bank account. I'm sure there was another investigation started by the bank or the IRS but the police was notified much faster.  So stupid.

[DapanasFruit]

At least, he got what he came for and then imprisoned for years for the crime. Now, I am just wondering if he did not utilized Bitcoin would it have been harder for Microsoft to caught the illegal act. This is a big reminder to anyone that using Bitcoin is not the best shield or a cover-up as eventually things can be seen by anyone using the blockchain. Anyway, maybe the best lesson is never to do anything bad.

[cr1776]

What a loser! It is not at all clear to me how people are employed in such large companies given that they have (at least in this case) a very low IQ. First he stole something using his data, and then he mixed Bitcoin in hopes that it would protect him, really ingenious

I think 9 years is an appropriate sentence in this case, provided it is served in full. Although when you look at how intelligent this guy is, I’d bet this isn’t his last trip to jail.

There are so many idiots everywhere, think about the people running Walmart, target, Macy's, Neiman Marcus, Kmart etc. I always assumed they had a brain, but they had nearly 20 years before they decided to try to build their online presence to compete with Amazon.  Look at IBM, not thinking about a Sun or Apollo coming along, and then Sun and Apollo not thinking about PCs or the PC manufacturers not being ready for smart phones and tablets. Either they were all blind or stupid.

I worked at a big tech company (20-25k people) right out of grad school in the early/mid 1990s and the number of idiots was staggering.

Look at the number of idiot voters who admit but their actions that they are so stupid they need someone to rule them and control them yet they believe they are smart enough to vote others in to control everyone else too.  Too dumb to make their own decisions but not to dumb to pick someone to rule them.