Microsoft Cheated By An Employee Worth $10 Million In Xbox Gift Cards

Microsoft has been cheated for months by an employee who was actually responsible for simulating purchases in Microsoft’s online store and looking for errors in the payment system. In the end, he had looted the company by more than $10 million.

Now Bloomberg reports on the case with an interesting background article. It’s about a young Microsoft developer who has now been convicted, has to pay over eight million dollars to Microsoft, and is in prison in the USA until 2027. Subsequently, he is threatened with deportation to his home country of Ukraine. Bloomberg tells how the young man who calls himself “Vova” eased Microsoft by more than ten million dollars.

It started out quite harmlessly at first. Vova had a full-time job at Microsoft’s headquarters in Redmond, Washington, testing the company’s e-commerce infrastructure. Bloomberg writes: “His team’s job was to simulate purchases in Microsoft’s online store and to look for errors in the payment system. That meant making a lot of bogus purchases in the store. When Kvashuk put a Dell PC in the cart, he used it He closed the transaction with a counterfeit credit card provided by Microsoft and recorded any errors. The system knew the purchase was counterfeit and would not deliver the device to his doorstep. At least that is how it should happen. “

Foolish Flaw In The System

But one day he discovers a mistake that should change his life. “A mistake so foolish and obvious that he couldn’t bring himself to report it to his managers”. He noticed that whenever he tested gift card purchases, the Microsoft Store gave out real codes. It dawned on him: There was practically no limit to the number of codes he could generate, and that for free.

It was about Xbox gift cards. These have a 5×5 code, for example, DD9J9-MXXXC-3Y6XD-3QH2C-PWDWZ. This code can be worth up to $100, depending on what you pay for the voucher and how you top up the voucher card. So Vova started out small, making Xbox cards worth between $10 and $100. When federal agents caught him after about two years, he had stolen more than 152,000 Xbox gift cards worth $10.1 million and was living on the proceeds in a lake house, drove a Tesla that cost around $160,000, and wanted a yacht and get a seaplane. How he remained undiscovered for so long and how he was able to turn the gift cards into cash has now been publicly examined for the first time since his conviction last November.

How He Managed To Escape For Long

In order to conceal his identity, the fraudster also used the logins of his colleagues. Then in early 2018, he created a computer program called PurchaseFlow.CS to speed things up. With a few clicks of the app, he could select a gift card value, the currency spent (US dollars, Euros, British pounds), and the desired number of purchases. He started selling the vouchers on the Internet – mostly overseas – with a 55 percent discount. Above all, he was looking for buyers who wanted to buy large voucher packages and who paid with Bitcoin.

Incidentally, he then explained his accumulating Bitcoin fortune with inheritance and gifts of money that he invested in Bitcoin at an early stage and now benefit from it. Microsoft was already on his trail. First, the Fraud Investigation Strike Team (FIST for short) noticed an inexplicable surge in online purchases using gift card codes. At first, they suspected fraud from the outside, but then quickly discovered that it was an inside job. Microsoft blacklisted many of the stolen gift cards before redeeming them, rendering them worthless to resellers. The financial authorities were also able to track the crypto funds. In February 2020, Vova was finally prosecuted for money laundering, identity theft, Accused and convicted of postal fraud, and filing false tax returns. You can find out more about its history at Bloomberg.