A federal judge sentenced 26-year-old Volodymyr Kvashuk yesterday for stealing more than $10 million from Microsoft through digital gift cards and Bitcoin. The IRS marked this as the first tax fraud c
A federal judge sentenced 26-year-old Volodymyr Kvashuk yesterday for stealing more than $10 million from Microsoft through digital gift cards and Bitcoin. The IRS marked this as the first tax fraud case involving Bitcoin.
Kvashuk accessed Microsoft's online sales platform between August 2016 and June 2018. He siphoned digital gift cards from the system, converted them to cash through online trading, and spent the proceeds on a $160,000 Tesla and a $1.6 million home. To obscure the money trail, he routed the Bitcoin through a mixer service before filing false tax returns that listed the income as family gifts. He also used colleagues' email accounts to cover his tracks.
Eighteen felony convictions followed, including six for money laundering and two for filing false tax returns. The Department of Justice stated: "Over the seven months of Kvashuk's illegal activity, approximately $2.8 million in Bitcoin were transferred to his bank and investment accounts. Kvashuk then filed fake tax return forms, claiming the Bitcoin had been a gift from a relative."
The judge ordered him to pay $8,344,586 in fines. He could face deportation after completing his sentence.
Ryan L. Korner, a Special Agent with the IRS Criminal Investigation unit, said: "Simply put, today's sentencing proves you cannot steal money via the Internet and think that Bitcoin is going to hide your criminal behaviors. Our complex team of cybercrimes experts with the assistance of IRS-CI's Cyber Crimes Unit will hunt you down and hold you accountable for your wrongdoings."
The U.S. Attorney's office noted the broader damage: "Stealing from your employer is bad enough, but stealing and making it appear that your colleagues are to blame widens the damage beyond dollars and cents."
