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Microsoft employee sentenced to 9 years in prison in first US Bitcoin tax fraud case

November 10, 2020

A former Microsoft engineer was sentenced to nine years in prison for stealing more than $ 10 million in currency storage value (CSV) digital value, including gift cards, from his former employer.

Volodymyr Kvashuk, a 26-year-old Ukrainian citizen who lives in Washington, used his employees’ accounts and identities to steal and then sell the CSV, creating the impression that his employees were responsible for the fraud. Kvashuk also used a bitcoin (BTC) blending service to further disguise the paper trail and filed fraudulent tax returns.

Brian Moran of the U.S. Attorney’s Office said:

“Stealing from your employer is bad enough, but stealing and making it look like your coworkers are the culprit increases the damage beyond dollars and cents.”

Microsoft employee sentenced to 9 years in prison in first US Bitcoin tax fraud case
Microsoft employee sentenced to 9 years in prison in first US Bitcoin tax fraud case

Kvushuk has been charged with 18 federal crimes, including six money laundering cases and two false tax returns. The Ukrainian used the stolen funds to buy a lakeshore house valued at $ 1.6 million and a Tesla vehicle valued at $ 160,000.

According to Ryan Korner, special agent for the Internal Revenue Service, the ruling is “the first Bitcoin case in the country with a tax component”.

“In short, today’s verdict shows that you cannot steal money over the internet and you believe that Bitcoin will hide your criminal behavior.”

Kvashuk worked at Microsoft from August 2016 until he was fired in June 2018.