Ex-Microsoft Employee Charged With First-Ever Bitcoin Tax Fraud in US

Key Takeaways

  • Ukrainian software engineer Volodymyr Kvashuk has been sentenced to nine years in prison for defrauding Microsoft during his tenure at the company.
  • Kvashuk stole $10 million, transferring $2.8 million value to his bank accounts via a Bitcoin mixing service.
  • This case is the first known U.S. example of false tax reports involving the first-ranked digital currency.

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A Ukrainian software engineer has been sentenced to nine years in prison after defrauding Microsoft of more than $10 million. Volodymyr Kvashuk transferred funds into Bitcoin as part of the elaborate ploy. 

Ex-Microsoft Employee Absconds With Millions

Over a period of seven months during his time at Microsoft, Kvashuk stole millions of dollars in “currency stored value,” a term often used to refer to assets such as digital gift cards.

Currently based in Renton, Washington, he was charged at a U.S. District Court yesterday for 18 felonies, including various counts of fraud, money laundering, identity theft, and filing false tax returns. 

Kvashuk’s crimes involved stealing Microsoft gift cards and reselling them via online marketplaces. At first, he took around $12,000 before raising the stakes to steal millions of dollars. 

SIMETRI small cap big gain

The 26-year-old was found to have used test email accounts of his co-workers to cover his tracks. Once he’d committed the crimes, he indulged in extravagant purchases, including a $1.6 million lakefront house and $160,000 Tesla car. 

Following a jury’s conviction in February 2020, Kvashuk was given a nine-year sentence yesterday and ordered to pay $8,344,586 in damages. He also faces deportation from the USA. 

Bitcoin as Medium for Tax Fraud 

Kvashuk’s case has drawn attention to his use of Bitcoin in an attempt to conceal his activity. 

He transferred $2.8 million in BTC into his bank and investment accounts, using a cryptocurrency tumbler service to hide his trail of transactions. Due to Bitcoin’s public blockchain…

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