The man is a 26-year-old Ukrainian citizen living in Washington, DC. According to the U.S. Department of Justice, from 2016 to 2018 (the year in which he was fired), he managed to defraud Microsoft with a really well-designed system.
As a computer expert, he tried to hide the theft and sales, and to do so, he also used Bitcoin Union to hide the funds that passed through his account. According to investigators, with this system he „cleaned up“ $2.8 million in Bitcoin. But he made a mistake by not declaring the Bitcoins to the IRS, claiming that they were a gift from a relative. And the IRS, you know, does not forgive.
His job in the company was to test Microsoft’s sales platform. As a result of this assignment, he had access to „currency store value“ (CSV), a system where gift cards, for example, were available.
The Ukrainian man took possession of a considerable amount of gift cards, which he then resold. He initially used his account to take possession of $12,000 worth of goods. Then he started using the email accounts of other colleagues.
The scam at Microsoft and tax fraud with Bitcoin
With the proceeds of the scam, the man bought a $1.6 million lake view house and a $160,000 Tesla vehicle. Not bad.
All this earned him charges of fraud, money laundering, identity theft, tax evasion, improper access to digital devices, improper access to emails.
For Judge James L. Robart, the man:
„He had no respect for the law.“
For Prosecutor Brian T. Moran, the defendant had no respect even for his colleagues:
„Stealing from your employer is bad enough, but stealing, and making it look like your colleagues are to blame clearly shows the damage beyond dollars and cents. This case required sophisticated technological skills to investigate and prosecute, and I am pleased that our legal partners and the U.S. Attorney’s Office had the necessary skills to bring these criminals to justice.
The prosecutors wrote to the Court, verbatim, that the defendant lived the life of a millionaire, with a pattern of lies and deception at every step:
„He took his colleagues one step away from being fired, using their test accounts to steal CSV. Instead of taking responsibility, he testified and told a series of outrageous lies. There is no sign that he feels remorse or regret for his crimes.
He defended himself claiming that he did not intend to steal from Microsoft, he was just working on a project that would benefit the company.
Anyway, the case is a milestone in the fight against cybercrimes. As Ryan L. Korner of the IRS (Internal Revenue Service, the US tax collection agency) explains:
„The trial was a great victory for the IRS-CI and the federal cybercrime team. The criminal acts of theft from Microsoft, and the subsequent submission of false tax returns, are the first case in which Bitcoin has a tax component“.
In practice, the attempt of the young Ukrainian was to use Bitcoin to hide the theft. But investigations show that Bitcoin is not anonymous. Korner continues:
„In simple terms, today’s ruling shows that one cannot steal money via the Internet and think that Bitcoin hides one’s criminal behavior. Our complex team of cybercrime experts, with the assistance of the Cybercrime Unit of the IRS-CI, will hunt you down and hold you responsible for your misdeeds“.