A former Microsoft Corp. engineer has been sentenced to nine years in prison for stealing $10 million in digital currency.

Ukrainian national Volodymyr Kvashuk worked at Microsoft at its head office in Redmond, Washington, starting in 2016 before he was fired in June 2018 and then arrested the next month. Kvashuk worked on Microsoft’s online sales platform, where he used a Microsoft Store account meant for testing to gain access to online sales where he obtained “currency stored value” such as Microsoft gift cards and then resold them online for bitcoin.

The theft took place over a seven-month period, starting with Kvashuk initially stealing small amounts of about $10,000 before escalating to theft in the millions. Although Kvashuk tried to hide his stolen funds by methods such as using a bitcoin mixing service, purchasing a large home and a Tesla helped bring his illicit activities to the attention of both Microsoft and law enforcement.

Kvashuk was found guilty in February on five separate counts of wire fraud, six counts of money laundering and seven other charges concerning his theft of funds.

“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,” prosecutors said in their sentencing memo released Monday. “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.”

The case is notable not only for the length of the sentence but some of the laws used to charge him. In the words of U.S. Internal Revenue Service Criminal Investigation Special Agent in Charge Ryan L. Korner, it was “the nation’s first Bitcoin case that has a tax component to it.” Kvashuk was pinged for filing false tax returns by not declaring his stolen funds as well.

Kvashuk is not the only former Microsoft employee to be found guilty of theft in recent years. Former Microsoft Director of Sports Marketing Jeff Tran was sentenced to 28 months in prison in June 2019 for stealing $1.5 million from Microsoft using Super Bowl tickets and fake invoices.

Photo: Microsoft Sweden/Flickr