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Date: 02-27-2020
Case Style:
Case Number: 2:19-cr-00143-JLR
Judge: James L. Robart
Court: United States District Court for the Western District of Washington (King County)
Plaintiff's Attorney: Michael Dion and Siddharth Velamoor
Defendant's Attorney:
Description: Seattle, WA - The United States of America charged Volodymyr Kvashuk with mail fraud, access device fraud, access to a protected computer in furtherance of fraud.
A former Microsoft software engineer was convicted of 18 federal felonies related to his scheme to defraud Microsoft of more than $10 million. VOLODYMYR KVASHUK, 25, a Ukrainian citizen residing in Renton, Washington, worked first as a contractor at Microsoft and then as an employee from August 2016 until he was fired in June 2018. Today, following a five-day trial, KVASHUK was convicted of five counts of wire fraud, six counts of money laundering, two counts of aggravated identity theft, two counts of filing false tax returns, and one count each of mail fraud, access device fraud, and access to a protected computer in furtherance of fraud. When sentenced by U.S. District Judge James L. Robart on June 1, 2020, KVASHUK faces up to twenty years in prison.
According to records filed in the case and testimony at trial, KVASHUK was involved in the testing of Microsoft’s online retail sales platform, and used that testing access to steal “currency stored value” such as digital gift cards. KVASHUK resold the value on the internet, using the proceeds to purchase a $1.6 million dollar lakefront home and a $160,000 Tesla vehicle. Initially, KVASHUK started stealing smaller amounts totaling about $12,000 in value using his own account access. As the thefts escalated into millions of dollars of value, KVASHUK used test email accounts associated with other employees. KVASHUK, a knowledgeable software developer, attempted to mask digital evidence that would trace the fraud and the internet sales back to him. He used a bitcoin “mixing” service in an attempt to hide the source of the funds ultimately passing into his bank account. In all, over the seven months of KVASHUK’s illegal activity, approximately $2.8 million in bitcoin was transferred to his bank accounts. KVASHUK then filed fake tax return forms, claiming the bitcoin had been a gift from a relative.
In closing arguments, Assistant United States Attorney Siddharth Velamoor said KVASHUK “hid behind his colleagues’ names…. dripping fraud and deceit every step of the way…. This is a simple case… anyway you look at it this is a crime of greed.”
KVASHUK testified at trial that he did not intend to defraud Microsoft. He claimed to be working on a special project to benefit the company.
That testimony was, “A house of lies on top of a previous house of lies,” Assistant United States Attorney Michael Dion told the jury.
The jury deliberated about five hours before returning the guilty verdicts.
“In addition to stealing from Microsoft, Volodymyr Kvashuk also stole from the government by concealing his fraudulent income and filing false tax returns. Kvashuk’s grand scheme was thwarted by the hard-work of IRS-CI’s Cyber Crimes Unit. Criminals who think they can avoid detection by using cryptocurrency and laundering through mixers are put on notice…you will be caught and you will be held accountable,” said IRS-CI Special Agent in Charge Ryan L. Korner.
The case was investigated by the Internal Revenue Service Criminal Investigation’s Western Area Cyber Crime Unit and the U.S. Secret Service.
Charges:
Mail Fraud - 18:1341
(1)
Mail Fraud - 18:1341
(1s)
Access Device Fraud - 18:1029(a)(5) and (c)(1)(A)(ii)
(1ss)
Wire Fraud - 18:1343
(2s-5s)
Access to a Protected Computer in Furtherance of Fraud - 18:1030(a)(4) and (c)(3)(A)
(2ss)
Mail Fraud - 18:1341
(3ss)
Wire Fraud - 18:1343
(4ss-8ss)
Making and Subscribing to a False Tax Return - 26:7206(1)
(6s-7s)
Money Laundering - 18:1957
(8s-13s)
Making and Subscribing to a False Tax Return - 26:7206(1)
(9ss-10ss)
Money Laundering - 18:1957
(11ss-16ss)
Aggravated Identity Theft - 18:1028A(c)
(14s)
Aggravated Identity Theft - 18:1028A(c)
(17ss-18ss)
Outcome: 02/25/2020 128 PROPOSED ORDER (Unsigned) Preliminary Order of Forfeiture (Dion, Michael) (Entered: 02/25/2020)
02/25/2020 129 MINUTE ENTRY for proceedings held before Judge James L. Robart - CRD: Ashleigh Drecktrah; AUSA: Michael Dion, Siddharth Velamoor; Def Cnsl: Joshua Lowther; Court Reporter: Debbie Zurn; JURY TRIAL - Day 6 completed on 2/25/2020. The court provides the jury question to counsel and discusses the answer with the parties. At 8:40 AM, the court responds in writing. At 9:00 a.m., the jury returns and resumes deliberations. At 11:40 AM, the jury returns with a verdict finding Defendant Volodymyr Kvashuk GUILTY on Counts 1ss-18ss. The jury is thanked and excused. Sentencing is set for Monday, June 1, 2020 at 9:30 AM before Judge James L. Robart. After a recess, the court hears from counsel re: forfeiture. The court takes the matter taken under advisement. Defendant remanded to custody. (AD) (Entered: 02/25/2020)
02/25/2020 130 UNREDACTED SEALED Jury Question and the Court's Response as to Volodymyr Kvashuk (Jury Foreperson's name unredacted) (AD) (Entered: 02/25/2020)
02/25/2020 131 Jury Question and the Court's Response 130 as to Volodymyr Kvashuk (Jury Foreperson name redacted) (AD) (Entered: 02/25/2020)
02/25/2020 132 UNREDACTED SEALED JURY VERDICT as to Volodymyr Kvashuk - Guilty on Counts 1ss-18ss. (Jury Foreperson name unredacted) (cc: USPO, PTS) (AD) (Entered: 02/25/2020)
02/25/2020 133 JURY VERDICT 132 as to Volodymyr Kvashuk Guilty on Counts 1ss-18ss. (Jury Foreperson and victim names redacted) (cc: USPO, PTS) (AD) (Entered: 02/25/2020)
02/25/2020 135 PRELIMINARY ORDER OF FORFEITURE as to Volodymyr Kvashuk by Judge James L. Robart. cc: USMO (AF); (AD) (Entered: 02/25/2020)
02/25/2020 136 COURT'S TRIAL WITNESS LIST (AD) (Entered: 02/25/2020)
02/25/2020 137 COURT'S TRIAL EXHIBIT LIST (AD) (Entered: 02/25/2020)
02/25/2020 138 RETURN OF EXHIBITS - all original exhibits admitted at trial returned to counsel pursuant to Local Rule 79(g). (AD) (Entered: 02/25/2020)
02/25/2020 139 ORDER re: juror lunches as to Volodymyr Kvashuk by Judge James L. Robart. (AD) (Entered: 02/25/2020)
Plaintiff's Experts:
Defendant's Experts:
Comments: