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Date: 07-18-2019
Case Style:
United States of America v. Volodymyr Kvashuk
Case Number: 2:19-mj-00321-PLM
Judge: Paula L. McCandlis
Court: United States District Court for the Western District of Washington (King County)
Plaintiff's Attorney: Michael Dion
Defendant's Attorney: Gregory Geist and Mohammad Ali Hamoudi
Description:
Seattle, WA - Former Microsoft Software Engineer Charged with Mail Fraud for Scheme to Steal Digital Value Such as Gift Cards
While Testing Online Sales Platform, Illegally used Testing Account to Embezzle more than $10 Million in Digital Currency
A former Microsoft software engineer was arrested and charged in a criminal complaint charging him with mail fraud for a scheme to steal $10 million in digital currency from Microsoft, announced U.S. Attorney Brian T. Moran. VOLODYMYR KVASHUK, 25, a Ukrainian citizen residing in Renton, Washington, worked first as a contractor at Microsoft and then as an employee from August 2016 until he was fired in June 2018. KVASHUK was involved in the testing of Microsoft’s online retail sales platform, and used that testing access to steal “currency stored value” such as gift cards. The complaint alleges KVASHUK resold the value on the internet, using the proceeds to purchase a $160,000 Tesla vehicle and a $1.6 million dollar lakefront home. KVASHUK made his initial appearance in U.S. District Court in Seattle today and is detained pending a further hearing on Friday July 19, 2019.
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.
Microsoft investigators confronted KVASHUK about the thefts in May 2018 and he was fired by the company in June 2018.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
Mail fraud is punishable by up to twenty years in prison and a $250,000 fine.
The case is being investigated by the U.S. Secret Service and the Internal Revenue Service Criminal Investigation’s Western Area Cyber Crime Unit.
Defendant was charge with committing mail fraud in violation of 18 U.S.C. 1341.
Outcome: See above.
Plaintiff's Experts:
Defendant's Experts:
Comments: