Microsoft Employee Sentenced to Nine Years On Bitcoin Scam


November 10, 2020 1:11 pm

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A former Microsoft employee has been charged with nine years for stealing more than $10 million in digital currency from his past employer in the form of currency stored value (CSV) including gift cards.

Volodymyr Kvahuk (26), a Ukrainian citizen residing in Washington, used his colleagues’ accounts and credentials to steal and sell the CSV making it appear as though his co-workers were responsible for the fraud.

Kvashuk also used a Bitcoin (BTC) mixing services to confuse the paper trail, telling the Internal Revenue Service that the $2.8 million worth of crypto that transferred through his accounts was sent by a relative.

The United States Department of Justice stated:

“Over the seven months of KVASHUK’s illegal activity, approximately $2.8 million in Bitcoin were transferred to his bank and investment accounts. KVASHUK then filed fake tax return forms, claiming the Bitcoin had been a gift from a relative.”

Kvashuk was working at Microsoft from August 2016 – June 2018, until he was being fired from the employment. Ryan Korner, special agent (Internal Revenue Service (IRS)) mentioned that the sentencing is “the nation’s first Bitcoin case that has a tax component to it.”

Korner added:

“Simply put, today’s sentencing proves you cannot steal money via the Internet and think that Bitcoin is going to hide your criminal behaviors.”

Brian Moran of the U.S. Attorney’s Office said:

“Stealing from your employer is bad enough, but stealing and making it appear that your colleagues are to blame widens the damage beyond dollars and cents.”

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