A former Microsoft engineer named Volodymyr Kvashuk was arrested and charged with mail fraud for allegedly stealing millions in digital money from Microsoft, according to the Department of Justice.
Kvashuk, 25, is a citizen of Ukraine who was living in Washington and working first as a contractor for Microsoft, and then a full time employee, from August 2016 to June of 2018.
His job was to test the company’s online sales platform, but he allegedly used that access to steal “currency stored value,” (CSV) like gift cards. The U.S. Attorney’s Office, Western District of Washington, said he resold the currency on the internet, and used the money to buy a $160,000 Tesla and $1.6 million lakefront property. Kvashuk has a hearing on Friday (July 19).
Kvashuk was supposed to test Microsoft store access with a fake account that would recreate the experience of what a shopper would go through on the site, and the system was set up in a way so that no items would be shipped out.
However, the testing program was not meant for the purchase of items with CSV. He allegedly used the test accounts to buy the CSV and then unloaded it on Internet reseller sites. At first, the amounts were relatively small, ranging in the area of $10,000. But then, the DOJ alleged, he upped his game, and started stealing amounts in the millions, using a bitcoin “mixing” service to obfuscate the origin of the money, so it wouldn’t be traced back to him.
Kvashuk is accused of funneling $2.8 million into his bank accounts over seven months. Investigators at Microsoft approached him in May of 2018, and he was fired a month later.
Mail fraud is punishable with a $250,000 fine and up to two decades in prison. In addition to the DOJ, the case is also being investigated by the U.S. Secret Service and the Internal Revenue Service Criminal Investigation’s Western Area Cyber Crime Unit.