Microsoft Engineer Gets Nine Years For Stealing $10 Million From Microsoft (arstechnica.com) 41
A former Microsoft software engineer from Ukraine has been sentenced to nine years in prison for stealing more than $10 million in store credit from Microsoft's online store. Ars Technica reports: From 2016 to 2018, Volodymyr Kvashuk worked for Microsoft as a tester, placing mock online orders to make sure everything was working smoothly. The software automatically prevented shipment of physical products to testers like Kvashuk. But in a crucial oversight, it didn't block the purchase of virtual gift cards. So the 26-year-old Kvashuk discovered that he could use his test account to buy real store credit and then use the credit to buy real products.
At first, Kvashuk bought an Office subscription and a couple of graphics cards. But when no one objected to those small purchases, he grew much bolder. In late 2017 and early 2018, he stole millions of dollars worth of Microsoft store credit and resold it online for bitcoin, which he then cashed out using Coinbase. US prosecutors say he netted at least $2.8 million, which he used to buy a $160,000 Tesla and a $1.6 million waterfront home (his proceeds were less than the value of the stolen credit because he had to sell at a steep discount).
Kvashuk made little effort to cover his tracks for his earliest purchases. But as his thefts got bigger, he took more precautions. He used test accounts that had been created by colleagues for later thefts. This was easy to do because the testers kept track of test account credentials in a shared online document. He used throwaway email addresses and began using a virtual private networking service. Before cashing out the bitcoins, he sent them to a mixing service in an attempt to hide their origins. Kvashuk reported the bitcoin windfall to the IRS but claimed the bitcoins had been a gift from his father.
At first, Kvashuk bought an Office subscription and a couple of graphics cards. But when no one objected to those small purchases, he grew much bolder. In late 2017 and early 2018, he stole millions of dollars worth of Microsoft store credit and resold it online for bitcoin, which he then cashed out using Coinbase. US prosecutors say he netted at least $2.8 million, which he used to buy a $160,000 Tesla and a $1.6 million waterfront home (his proceeds were less than the value of the stolen credit because he had to sell at a steep discount).
Kvashuk made little effort to cover his tracks for his earliest purchases. But as his thefts got bigger, he took more precautions. He used test accounts that had been created by colleagues for later thefts. This was easy to do because the testers kept track of test account credentials in a shared online document. He used throwaway email addresses and began using a virtual private networking service. Before cashing out the bitcoins, he sent them to a mixing service in an attempt to hide their origins. Kvashuk reported the bitcoin windfall to the IRS but claimed the bitcoins had been a gift from his father.
Re:Paid the IRS (Score:5, Informative)
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No, that is only a function of the down right radical interpretations of the 9th and 10th amendments the prevails today. You know that because the 16th amendment would never have been advanced in the first place if the legal minds at the time really believed the federal government had authority to tax ways payed to you while you did work to earn them inside a single state.
Now from a a federal perspective I might agree with you that States if not prohibited by their own constitutions can tax just about anyth
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You said it right here:
The only reason the 16th amendment exists is because of a SCOTUS decision
In other words the Justices on our highest court no doubt more learned when it comes to constitutional law than you or I already decided you are wrong.
Further taxes would have to be apportioned otherwise, its also there in plain black text. In other words it would would have to be tax that essentially generates aligned to the states population. It would be basically unworkable for the feds to look at individuals.
Re: Paid the IRS (Score:2)
He what?! (Score:2)
Dumbass! - Red Forman
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he wasn't caught because he reported the income which made jump in personal worth that would be obvious to IRS. He was caught for other mistakes.
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Even if he hadn't been caught for his other mistakes, reporting his mysterious Bitcoin income sure would have done it.
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Wrong. IRS didn't care. Failing to report is the stupid mistake many make. You report your windfall on tax form and the IRS 8300 at bank if you deposit. No problem.
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Wrong. IRS didn't care. Failing to report is the stupid mistake many make. You report your windfall on tax form and the IRS 8300 at bank if you deposit. No problem.
Wrong. *Filing* is the mistake many make. See explanation above about what the tax law actually says.
If you sign the forms (W-4/W-9), and file information returns (W-2/1099), then you *must file* and *pay*. If the law does not apply to you, don't file--and they cannot touch you.
If you sign and then don't file, then you are truly screwed. This is how they get everyone. W-4 and W-9 are signed under penalty of perjury. Once you sign, you are now liable for the taxes because you said you were. If you fight that
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Addendum:
How they get you is "substitute W-9"s. When you open a bank account, the bank (erroneously and illegally) will "require" your SSN (the law does not require they collect it, it only requires they *request* it--you can legally not provide it). If you carefully read the form they use, (which will have wrong language), it will say on there somewhere something to the effect of "this serves as a substitute W-9".
Brokerage (coinbase) accounts do the same thing. Good luck trading stocks without them filing
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As explained, both coinbase and the bank will have already collected "substitute" W-9 forms and then filed 1099/Bs against him.
So they filed *for him*. Which means he must subsequently also file his 1040 and follow all of the computation regulations--it's gotta match what the broker and the bank reported for him.
So, currently, there's really no way to not file. If, however, you found a broker and a bank that actually followed the law and did not file 1099 information returns about your own legal property an
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Right, he files and PAYS the proper amount. Then there is no problem. Criminals unwillingness to take the tax hit which can go third to close to half get them caught.
Re:He what?! (Score:4, Informative)
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No, you are blathering in historical ignorance, case history proves you wrong.
Yes, you file and you pay. Then there is no problem.
Re:He what?! (Score:5, Informative)
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Reporting a gift does not mean paying a tax. In the US gifts are not taxable for the beneficiary. Gifts over a certain amount (fairly high at the moment) are taxable under the gift an inheritance tax. I assume he reported the bitcoin as a gift to avoid suspicion knowing that Coinbase as going to report the transaction to the IRS.
He now gets to... (Score:2)
...spend his endless days working on his prison cred.
As an accountant... (Score:3)
...I'm a little embarrassed this wasn't caught quickly but not surprised
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they were too busy writing updates to Win10 which bricked computers
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you're right - I missed that in the timeline re: the year charged
Heh...this remnds me... (Score:5, Funny)
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Cheap paperback dictionaries are probably cheap enough that it doesn't need approval. They are under a dollar at most stores anyways. There aren't many office supplies cheaper, other than maybe an individual pen or pencil, but they likely didn't came in bunches that cost more.
And the problem with other off
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We did something similar but had a bottle of purple paint we marked up to like $600 so real customers would never order. We'd order it using the company CC, (so we were paying ourselves) and the end to end test ended up being out cost on the bottle after it all washed out across the GL.
We had a good number of bottles of pain laying around our cube at various times.
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We had a good number of bottles of pain laying around our cube at various times.
That must have been an interesting place to work. In the immortal words of Dr. Smith, "Oh the pain!" [youtube.com]
I'm just talking about fractions of a penny here. (Score:1)
9 YERS!?! (Score:2)
The joke's on him (Score:3)
Now that Microsoft is closing all their stores.