The developer received a sentence of 9 years in prison for committing 18 crimes. He used a BTC mixing service to try to hide where the money came from.
On November 9th, former Microsoft programmer Volodymyr Kvashuk received a sentence of nine years in prison. He had covered up a plot to defraud the software company of more than USD 10 million. A court in Seattle, in the United States, issued the conviction after the 26-year-old man committed 18 federal crimes.
Between 2016 and 2018, Kvashuk worked first as a contractor and then as a direct employee. The engineer participated in the development of an online retail sales platform, which would use gift cards, according to the Justice Department.
Taking advantage of his access to trials, the developer stole the cards which he later resold on the Internet in exchange for Bitcoin (BTC). During the early days of the scam, Kvashuk used his e-mail account to steal USD 12,000.
Trying to get more money, the former programmer began to use the e-mail accounts of his co-workers. With this, he sought to hide his action and hold other developers responsible.
Every time Kvashuk obtained bitcoins, he used cryptocurrency mixing services to obfuscate and try to hide the origin of the funds entering his bank and investment accounts. He used the same modus operandi for more than seven months.
In that period, the engineer stole 2.8 million worth of BTC. On his tax return, he claimed that a relative had given them to him. With the money, he bought a home valued at USD 1.6 million and a Tesla car at USD 160,000.
Kvashuk first robbed Microsoft and then filed false tax returns. This is the first case of Bitcoin in the United States that has had a tax component, said Ryan Korner, a special agent with the Internal Revenue Service (IRS).
Bitcoin, Crime and Fund Tracing
The investigator stressed that the sentence shows that it is not possible to steal money through the Internet and think that Bitcoin will hide criminal behavior. What Korner said demystifies the argument that criminals can freely use Bitcoin to commit crimes undetected.
The developer will have to compensate Microsoft with USD 8.3 million as part of the sentence. The crimes that he committed include wire fraud, money laundering, aggravated identity theft, filing false tax returns, e-mail fraud, device access fraud, and access to a protected computer to commit fraud.
Prosecutor Brian Moran explained that “stealing from an employer is a very serious crime, but stealing and making your colleagues appear guilty is even worse.” To trace these crimes, the authorities “required sophisticated technological skills to investigate and prosecute.”
In April 2018, there was another case involving an engineer, co-workers, and the theft of bitcoins. Zhong Mo, an operations and maintenance engineer from China, went to prison after a failed hacking attempt at the company where he worked. Mo had already stolen 100 BTC from his employers.
By Alexander Salazar