Fraud Friday – “Office Space” Scheme Comes to Life at Microsoft

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Anyone who has ever worked in an office environment is familiar with the very-specific, um, peculiarities of working in close quarters with a bunch of other hominids wearing uncomfortable clothing and engaging in forced camaraderie.

Having grown up very much working class, I found that the quasi-white-collar office environment is way different than a blue-collar setting in a myriad of ways, some better (I’m telling you, most people don’t properly appreciate the miracle of indoor climate control), and of course, some worse (don’t get me started on “teambuilding” exercises. In jobs where you do real work, that’s called Getting Shit Done.) I just don’t think humans are well-suited to being confined to little artificial physical boxes and staring at glowing screens all day – it makes us slowly go insane.

Nobody captured the bizarre, utterly farcical nature of the late 20th century western office workplace like Mike Judge did with his cult-classic film Office Space. Having been a “knowledge worker” for 15 years now, I can say with total confidence that I have yet to work in an office where the employees don’t know most of the film’s dialogue by memory. It’s as if Judge and his writing and production team had a camera in almost every Dunder-Mifflin-esque office in America in the late 1990’s. So much resonates: The clueless boss, the soul-crushing administrivia, the utterly unstoppable inertia of pointless bureaucracy. If by some twist of fate you haven’t seen this movie, stop what you are doing and go find it and watch it. Highly recommended.

[Spoiler Alert]

In one of the main plot beats of the film, protagonist Peter Gibbons (Ron Livingston, playing the role of a lifetime), and his much-maligned office drone buddies Michael (Bolton!) and Samir, are discussing how to achieve financial independence and thus freedom from the soul-sucking hell that is Initech, their blandly malevolent employer.

Peter confides in his colleagues that he’s developed software code that can take the “fractions of a penny” from various financial transactions that Initech’s software manages, and diverts those micropayments into his own personal external bank account. Hilarity and moral dilemmas ensue (seriously, go watch the movie again).

The thing that always struck me about that plot element was how absolutely PLAUSIBLE it seemed. Granted, I’m no software developer, and I know that any IS security person will bore you to death with the 3,497 internal controls that every software suite contains to ensure that such a scheme is impossible in the “real world,” and yet, here we are…

https://komonews.com/news/local/jury-former-microsoft-engineer-stole-10-million-in-digital-fraud-scheme

SEATTLE – A former Microsoft software engineer was convicted Tuesday of 18 federal felonies related to his scheme to defraud Microsoft of more than $10 million, said U.S. Attorney Brian T. Moran.

Volodymyr Kvashuk, 25, a Ukrainian citizen residing in Renton, worked first as a contractor at Microsoft and then as an employee from August 2016 until he was fired in June 2018.

After a five-day trial in U.S. District Court in Seattle, 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.

He faces up to 20 years in prison when sentenced in June by Judge James L. Robart.

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 lakefront home and a $160,000 Tesla vehicle, court documents say.

As the thefts escalated into millions of dollars of value, Kvashuk used test email accounts and passwords associated with other employees, according to the case file.

Kvashuk attempted to mask digital evidence that would trace the fraud and the internet sales back to him. Kvashuk then filed fake tax return forms, claiming the money had been a gift from a relative, court documents show.

In closing arguments, Assistant U.S. 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 U.S. Attorney Michael Dion told the jury.

The jury deliberated about five hours before returning the guilty verdicts.

From KOMO TV in Seattle, Washington

Well, I guess they’ve got bigger things to worry about out in Washington State than a Ukrainian hacker kid, but nevertheless, the audacity of the scheme is somewhat noteworthy. Look for many more of these to come in the future.

Have a great weekend, and try not to catch COVID-19, folks!

 

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