Washington – A former Microsoft software engineer was arrested today 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.
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