Your one-stop web resource providing safety and security information to manufacturers

A former Microsoft software engineer was busted Tuesday and charged with mail fraud for a scheme to steal $10 million in digital currency from Microsoft, federal officials said.

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.

RELATED STORIES
Engineer Charged in Train IP Theft
Sony Attacker gets 27 Months
6 Busted in Cryptocurrency Scheme
Congressional Aide gets 4 Years for Data Leak

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, officials said. He then resold the value on the Internet, using the proceeds to purchase a $160,000 Tesla vehicle and a $1.6 million dollar lakefront home, according to the charges.

Kvashuk made his initial appearance in U.S. District Court in Seattle Tuesday and is detained pending a further hearing on Friday.

Cyber Security

In his job, 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 federal complaint said. 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, according to the charges.

A knowledgeable software developer, Kvashuk 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 the activity, $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.

If found guilty, mail fraud is punishable by up to 20 years in prison and a $250,000 fine.

Pin It on Pinterest

Share This