A former Microsoft employee was convicted of multiple felonies in federal court after stealing millions of dollars worth of items and reselling them for personal funds while he worked for the tech giant.
The employee in question started with the company in 2016 as an independent contractor, but he eventually was hired as a full time employee and worked there until June of 2018 in various engineering roles. He remained a Ukranian citizen during his time with the company.
Engineer uses access to retail website to exploit stored value gift cards and other items
Much of what the suspect stole was in online gift cards and other forms of stored value and digital currency. He had special access to the cards and other merchandise when he was staffed on a project to test and build Microsoft’s online retail sales platform. Law enforcement estimated that he stole approximately $10 million during the course of his employment, and records show that $2.8 million of those funds went directly into his bank accounts.
After taking the digital currencies, he resold these items to various people and used the money to buy a number of luxury items such as a Tesla Model X valued at over $150,000 and a lakefront home for over $1 million. He also eventually used the money he was earning to buy millions of dollars worth of bitcoin. Prosecutors found that he used various digital tools to cover his tracks, such as a mixing service that is supposed to make cryptocurrency transactions untraceable. The deposits were spread over a seven month span to avoid moving very large sums of money around at once. He then attempted to say that the large sums of money he was getting were gifts from family members when filing his taxes those years.
When Microsoft initially discovered the misconduct, he was terminated after a short confrontation and internal investigation. They contacted law enforcement shortly afterward to report their findings. The U.S. Department of Justice eventually handled the matter and moved forward with prosecution. When he was initially charged in 2018, prosecutors only wanted to bring mail fraud charges, but the suspect was eventually charged with 18 different felonies related to all of his actions over the two year period. Some of the additional crimes included multiple counts of wire fraud, money laundering, identity theft, filing false tax returns, access device fraud, and accessing a computer to commit fraud.
The five day trial in federal court in Seattle ended with a conviction on Tuesday night. At his sentencing hearing, he could receive up to 20 years in jail. There was no exact day given for the sentencing hearing in the news report, but it is scheduled for sometime in June of 2020.
Federal prosecution and interstate crimes
While most criminal cases that involve stealing are prosecuted by the local government rather than the U.S. government, there are some exceptions. Theft crimes are prosecuted by the federal government if they involve interstate transactions or moving illegal materials across state lines. The federal government is given the authority to regulate many different interstate matters from the commerce clause of the U.S. constitution, including fraudulent transactions that involve the banking system and illegal gambling due to their effects on interstate commerce.