Microsoft engineer stole $10 million by selling Xbox gift cards for bitcoin

A Microsoft employee received nine years in prison.

Ukrainian developer Volodymyr Kvaschuk was sentenced to nine years in prison for stealing more than $ 10 million from Microsoft. The verdict was passed back in 2020, but only now the details of the scheme used by the criminal have become known.

The Ukrainian worked at Microsoft from August 2016 to June 2018. Previously, he was a contract employee, and then went to the state and worked in Renton, Washington. Kwashchuk was a QA tester on the Universal Store Team responsible for e-commerce activities.

In this position, employees have the ability to create accounts using dedicated email addresses and credit cards. This allows you to make free purchases with discount cards. To protect itself from fraud, the company blocked the delivery of physical goods ordered in this way.

Vladimir got around this limitation. The Ukrainian bought gift cards through his account, after which their value could be credited to his account and receive a discount in the digital or offline Microsoft store.

But Kvaschuk went even further, using the scheme for personal gain – selling digital cards to third parties. According to the prosecution, he caused the company $ 10 million in the loss by trading promotional codes at understated prices.

According to investigators, once a programmer began selling so many codes that it drove the prices of Xbox gift cards across the reseller market.

Two years later, Kwashchuk has already stolen more than 152,000 cards for a total of $ 10,100,000. During this time, he managed to buy Tesla for $ 162,899 and a house by Lake Washington worth more than $ 1,600,000.

At some point, the scheme began to crack: buyers began to complain that Kvaschuk’s cards did not work. Its main customers, Avsterbone and Makoo, reached out to Microsoft support to investigate the cause of the problem. There they were told that the company was investigating the stolen cards.

In 2018, the internal security service discovered a “leak” and blocked testers’ accounts, but could not identify the attacker. With the help of Scotland Yard detectives, Kwashchuk was nevertheless caught – he ordered three Nvidia video cards to a non-existent address, which raised suspicions. During subsequent searches at his home, they found $ 4,000 in cash, flash drives with “hundreds of thousands” of these gift codes, as well as the keys to a Tesla car and a plan written by Kvashchuk for the coming years, where he described what else he would spend his fortune on.

These events took place in 2018-2020, during which time there are still many cheap codes on the market for Game Pass and other digital products from Microsoft.

In total, 152 thousand cards were stolen for a total of $ 10 million. Kvaschuk owned a house near Lake Washington for $ 1.6 million, after a search of which the investigation received even more evidence of the developer’s guilt. According to the verdict, the offender must pay a fine of $ 8.3 million and spend nine years in custody in the colony.

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