Ex-Microsoft Engineer Used Bitcoin to Help Embezzle Millions From Tech Giant

A U.S. court has found a former Microsoft software engineer guilty of embezzling millions of dollars and turning it into bitcoin (BTC) to fund a life of luxury.

Volodymyr Kvashuk, 25, was convicted Tuesday by the U.S. District Court in Seattle of 18 separate federal felonies that defrauded Microsoft out of a total of $10 million, according to a statement from the Department of Justice.

A Ukrainian citizen based in the town of Renton, Washington, Kvashuk worked full time for Microsoft from 2016 to 2018. Involved in developing and testing the company's online retail sales platform, he used his account access to steal what is described as "currency stored value" including digital gift cards that he subsequently re-sold on the internet over a seven-month period.

Kvashuk built a lavish lifestyle using the embezzled funds, purchasing a $160,000 Tesla and a lakefront home worth an estimated $1.6 million. After uncovering the scheme, Microsoft confronted Kvashuk and fired him in June 2018.

Kvashuk, who claimed at trial to be working on a special project for the company, stole amounts totaling roughly $12,000 under his own account before using test email accounts associated with fellow Microsoft employees to begin embezzling millions of dollars from the company. Changing funds into bitcoin, he would use a mixing service to obfuscate its origins before transferring the ill-gotten gains into his bank account.

In total, bitcoin proceeds of over $2.8 million were transferred into his bank account. In tax returns filed during this period, Kvashuk claimed the funds were a gift from a relative.

The trial, which lasted five days, found the engineer guilty on 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, bank card fraud and using a company computer for illicit purposes.

Speaking after the trial, special agent Ryan Korner from the Internal Revenue Service's criminal investigations division highlighted that Kvashuk's conviction was a result of work carried out by the IRS.

"Criminals who think they can avoid detection by using cryptocurrency and laundering through mixers are put on notice ... you will be caught and you will be held accountable," he said.

Kvashuk faces as much as 20 years in prison when he is sentenced by the presiding judge on June 1.