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The U.S. District Court in Seattle convicted a former Microsoft employee of 18 federal felonies. Ultimately stealing over $10 million in less than two years, the perpetrator used a bitcoin “mixing” service in an attempt to hide his actions.
18 Federal Offenses
Volodymyr Kvashuk is a Ukrainian citizen who worked full-time for Microsoft as a software engineer from August 2016 until June 2018. Before he was eventually fired, he was responsible for testing Microsoft’s online retail sales program. Kvashuk used his position to steal “currency stored value,” such as digital gift cards, according to the official Court Ruling.
After a five-day trial, the U.S. District Court in Seattle found him guilty on all 18 charges. They include five wire frauds, six counts of money laundering, two counts of aggravated identity theft, two counts of filing false tax returns, mail fraud, and access device fraud. Judge James Robart sentenced him to twenty years in prison.
During his time of illegal actions, Kvashuk transferred approximately $2.8 million worth of bitcoin to his bank accounts. He used bitcoin “mixing” services to hide the source before sending the assets.
Despite his attempts, Assistance U.S. Attorney Siddharth Valemoor said that his actions appeared rather obvious:
“[Kvashuk] hid behind his colleagues’ names, dripping fraud, and deceit every step of the way. This is a simple case, anyway, you look at it this is a crime of greed.”
During the trial, Kvashuk claimed that he was working on a special Microsoft project. He never intended to defraud the company or its customers.
Do Not Use Mixers
Out of the mentioned numerous felonies, Kvashuk’s attempt to conceal taxes caught the attention of the IRS-CI’s Cyber Crimes Unit. Ryan Korner, the Special Agent in Charge, said that his organization found the Ukrainian despite his usage of the bitcoin mixer.
In fact, Korner issued a warning against everyone who considers using such services:
“In addition to stealing from Microsoft, Volodymyr Kvashuk also stole from the government by concealing his fraudulent income and filing false tax returns. Kvashuk’s grand scheme was thwarted by the hard work of IRS-CI’s Cyber Crimes Unit.
Criminals who think they can avoid detection by using cryptocurrency and laundering through mixers are put on notice…you will be caught, and you will be held accountable.”