Date: November 9, 2020 Contact: firstname.lastname@example.org Seattle – A former Microsoft software engineer was sentenced today in U.S. District Court in Seattle to nine years in prison for 18 federal felonies related to his scheme to defraud Microsoft of more than $10 million. Volodymyr Kvashuk, 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. In February 2020, Kvashuk was convicted by a jury of five counts of wire fraud, six counts of money laundering, two counts of aggravated identity theft, two counts of filing false tax returns, and one count each of mail fraud, access device fraud, and access to a protected computer in furtherance of fraud. At his sentencing hearing, U.S. District Judge James L. Robart said Kvashuk "didn't have any respect for the law." "The Volodymyr Kvashuk trial marked a big win for IRS-CI and the federal cybercrimes team. 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-CI Special Agent in Charge Ryan L. 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. Our complex team of cybercrimes experts with the assistance of IRS-CI's Cyber Crimes Unit will hunt you down and hold you accountable for your wrongdoings." According to records filed in the case and testimony at trial, Kvashuk was involved in the testing of Microsoft's online retail sales platform and used that testing access to steal "currency stored value" (CSV) such as digital gift cards. Kvashuk resold the value on the internet, using the proceeds to purchase a $1.6 million dollar lakefront home and a $160,000 Tesla vehicle. Initially, Kvashuk stole smaller amounts totaling about $12,000 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 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. "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," said U.S. Attorney Moran. "This case required sophisticated, technological skills to investigate and prosecute, and I am pleased that our law enforcement partners and the U.S. Attorney's Office have the skill sets needed to bring such offenders to justice." In their sentencing memo, prosecutors noted that Kvashuk's scheme cast other Microsoft employees under the glare of suspicion. "Kvashuk used the proceeds to live the life of a millionaire, driving a $160,000 car and living in a $1.6 million waterfront home. Kvashuk's scheme involved lies and deception at every step. He put his colleagues in the line of fire by using their test accounts to steal CSV. Rather than taking responsibility, he testified and told a series of outrageous lies. There is no sign that Kvashuk feels any remorse or regret for his crimes," prosecutors wrote to the Court. Kvashuk testified at trial that he did not intend to defraud Microsoft. He claimed to be working on a special project to benefit the company. The jury deliberated about five hours following a five-day jury trial before returning the guilty verdicts. Kvashuk was ordered to pay $8,344,586 in restitution. He may be deported following his prison term. The case was investigated by the Internal Revenue Service Criminal Investigation, Western Cyber Crimes Unit and the U.S. Secret Service. The case was prosecuted by Assistant United States Attorneys Michael Dion and Siddharth Velamoor.