A former Microsoft engineer received a nine-year prison sentence for $10 million dollar criminal scheme involving bitcoin and digital gift cards.
26-year-old Ukrainian citizen residing in Washington has been sentenced in the U.S. District Court in Seattle for 18 federal felonies, including six counts of money laundering and two counts of filing false tax returns.
A former Microsoft has stolen more than $10 million in crypto from his past employer in the form of “currency stored value” (CSV), including gift cards.
Volodymyr Kvashuk used his fellow employees’ accounts and identities to steal and then sell the CSV, and he made it look as though his co-workers were responsible for the fraud.
According to the U.S. Department of Justice (DoJ), “over the seven months of Kvashuk’s illegal activity, approximately $2.8 million in Bitcoin were transferred to his bank and investment accounts.
Kvashuk used a Bitcoin mixing service to obfuscate the paper trail, In his tax return forms he claimed the Bitcoin had been a gift from a relative.
This sentencing is “the nation’s first Bitcoin case that has a tax component to it,” according to Internal Revenue Service special agent Ryan Korner. He also asserted the sentencing highlights the increasing sophistication of the agency’s criminal division in identifying unreported crypto-asset transactions.