Microsoft Engineer Found Guilty Of $15 Million Fraud Involving Xbox Subscriptions

microsoft xbox fraudImage: Getty

A former Microsoft software engineer has been found guilty of fraud after abusing his access to Microsoft's online shopping system to gain in-store credit. According to U.S. federal court records, Volodymyr Kvashuk used a loophole in the system to credit across multiple accounts and then resold them online. He made over $15 million ($US10 million) from these sales.

Kvashuk was employed as a tester for Microsoft in 2016 according to the Seattle court, and used his developer access to create numerous new accounts, which were then assigned Microsoft store credits over a period of seven months. The court found that Kvashuk used a complex system of Bitcoin transfers to sell these in-store credits online, which netted him around $2.8 million in bitcoin.

The gamers purchasing these in-store credits began using them to purchase Xbox subscriptions, but the sudden influx of purchases alerted Microsoft's fraud team to the scam.

The money made from these sales was used by Kvashuk to purchase a $2.7 million ($US1.8 million) house, as well as a $240,000 ($US160,000) Tesla and other luxury items. He was found to have disguised these purchases with false tax statements, declaring the bitcoin a gift from a relative.

Around $12,000 in Xbox store credits were also added to Kvashuk's personal Microsoft account, an amount which reportedly put him directly under investigation by Microsoft's internal fraud unit. He was fired from the company in 2018 for the scam.

His testimony that he was working on a 'special project' for his bosses was rejected.

Kvashuk was convicted on 18 seperate felonies, including wire fraud, money laundering, aggravated identity theft and filing false tax returns. He's expected to be sentence in June, and could face up to 20 years in prison.


    I guess it's true what they say, you win some, you lose some.
    In this case, a temporary $15mil and 20 years of your life.

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