The crypto space is changing the entire global economic landscape. In the same context, many fraudsters have joined the nascent space aiming to maximize profits. In the latest news, a former Microsoft engineer has been sentenced to 9 years for stealing over $10 million in digital value from his previous employer in the form of “currency stored value” (CSV) including gift cards.
Volodymyr Kvashuk, a 26-year-old Ukrainian national residing in Washington, reportedly used the identities and accounts of his colleagues at work to steal and then sell the CSV, which made it seem as though his co-workers were actively involved in the fraud.
Kvashuk also employed a Bitcoin (BTC) mixing service aiming to hide the involved paper trail. He told the Internal Revenue Service (IRS) that the $2.8 million worth of cryptocurrency that passed through his accounts were only gifts that had been sent from a relative. The United States Department of Justice stated:
“Over the seven months of KVASHUK’s illegal activity, approximately $2.8 million in Bitcoin were transferred to his bank and investment accounts. KVASHUK then filed fake tax return forms, claiming the Bitcoin had been a gift from a relative.”
Kvashuk previously worked at Microsoft from August 2016 until being sacked in June 2018. Special agent Ryan Korner who works with the IRS said that the sentencing is the country’s first Bitcoin case that comprises some form of tax component. Korner said that the sentencing highlights the growing sophistication of the agency’s criminal division in discovering the unreported crypto-asset transactions:
“Simply put, today’s sentencing proves you cannot steal money via the Internet and think that Bitcoin is going to hide your criminal behaviors.”
The Case
Brian Moran, who works at the U.S. Attorney’s Office, said:
“Stealing from your employer is bad enough, but stealing and making it appear that your colleagues are to blame widens the damage beyond dollars and cents.”
Kvashuk was found guilty of 18 federal felonies, among them 6 counts of money laundering and two counts of filing fraudulent tax returns. The Ukrainian national used the stolen money to acquire a $160,000 Tesla vehicle and a $1.6 million lakefront home.
Throughout the United History, tax evasion charges have been leveled at many criminal schemes. Prohibition-era gangster leader Al Capone famously spent 7 years in federal prison from 1931 after being found guilty of knowingly evading taxes.
