Ex-Microsoft Dev Jailed for $10 Million Scheme Involving Bitcoin

A former Microsoft developer has been sentenced to nine years in jail by a Seattle District Court after he hatched a complex scheme, involving Bitcoin, to defraud his employer of $10 million. The case is the first of its kind in the US, according to a Department of Justice press release issued on Monday. 

The court heard that Ukrainian citizen Volodymyr Kvashuk, 26, used his employee access to steal funds from digital gift cards, while working at Microsoft in 2016. He then resold the value online and used the proceeds to buy a $1.6 million home, a Tesla car, and other luxuries. 

Kvashuk employed a Bitcoin mixing service to mask the source of the funds entering his bank account, and used colleagues' test accounts to steal even more funds, according to the announcement. 

In February, a jury convicted him of money laundering, wire fraud, identity theft, access device fraud and access to a protected computer in furtherance of fraud. Notably he was also found guilty of filing false tax returns.

“Kvashuk’s criminal acts of stealing from Microsoft, and subsequent filing false tax returns, is the nation’s first Bitcoin case that has a tax component to it,” said IRS Special Agent Ryan Korner. “Simply put, today’s sentencing proves you cannot steal money via the Internet and think that Bitcoin is going to hide your criminal behaviors.

Kvashuk was ordered to pay $8,344,586 in restitution, and could be deported following his prison term.