A junior engineer at Microsoft was secretly siphoning millions of dollars from the Xbox ecosystem using illicitly-created gift cards, according to a report from Bloomberg published Thursday. The engineer, Volodymyr Kvashuk, was sentenced to nine years in prison last November for embezzling more than $10 million.
Kvashuk committed the theft right under Microsoft's nose, using test accounts as part of the company's ecommerce team to generate thousands of pages of genuine Xbox gift card codes for varying values of real-world dollars. He then turned around and sold those codes, at a steep discount, to eager buyers on the website Paxful, who presumably turned around and resold those codes at a markup. The trick was that Microsoft's internal system for testing gift card purchases spat out real codes, instead of fake ones, which gave Kvashuk the bright idea to funnel those codes through the online market.
Kvashuk was rewarded with millions in bitcoin, which he used to purchase lavish gifts for himself and his girlfriend, including a red Tesla and a multimillion-dollar home, with plans to spend his other millions on a yacht and a seaplane. But, according to Bloomberg, he made a series of rookie mistakes that resulted in his capture, after Microsoft became aware of a sudden and irregular spike in gift card redemption levels that set off the red alarm at its fraud division. It's a fascinating story and well worth a full read over at Bloomberg.