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delete12345

One Winged Slayer
Member
Nov 17, 2017
19,690
Boston, MA
Volodymyr Kvashuk was sentenced to 9 years in prison, and will be charged restitution of $8.3 million.

The Xbox gift card came with a string of 25 letters and numbers. The digits, known as a 5x5 code, were sent in an email, but they were no different from the numbers and letters etched onto the gift cards hanging off tall racks near the checkout aisle at CVS or Target, arrayed in a Rubik's Cube of colors. These stores sell them on behalf of Apple, Applebee's, Disney, Domino's, and pretty much every other company you can think of, including Microsoft Corp., which markets its cards under the Xbox brand. The cards themselves, of course, are worthless, but each 5x5 code corresponds to a dollar amount. In this case the code, DD9J9-MXXXC-3Y6XD-3QH2C-PWDWZ, was worth $15 toward the purchase of anything that Microsoft sold online—video games, Office and Windows software, Lenovo laptops, Sonos speakers, and the like.

www.bloomberg.com

Robbing the Xbox Vault: Inside a $10 Million Gift Card Fraud

A junior Microsoft engineer figured out a nearly perfect Bitcoin generation scheme in the ultimate virtual currency cheat.

Non-paywalled version:

www.pcgamer.com

Microsoft engineer stole $10 million by selling Xbox gift cards for bitcoin

Volodymyr Kvashuk was sentenced to 9 years in prison, and will be charged restitution of $8.3 million.

Steal my Xbox gift cards if old.
 

Zemst

Member
Oct 27, 2017
3,095
I mean he should have known they track metrics with these things..certainly he wasn't the only one, just stupid enough to take 10 million worth. RIP buddy.
 

mrmoose

Member
Nov 13, 2017
21,187
I mean he should have known they track metrics with these things..certainly he wasn't the only one, just stupid enough to take 10 million worth. RIP buddy.

He exploited a bug in their system, though you're right that he should've known he would have been found out sooner or later.

His argument that this is all fake money so he shouldn't be prosecuted, and then the prosecutor saying that the house he bought and all the crap he bought is real, is a classic moment though.
 

J-Skee

The Wise Ones
Member
Oct 25, 2017
11,107
Dudes like this always screw up when they go Frank Lucas with it.
 

Wrexis

Member
Nov 4, 2017
21,247
Yeah credit to Austin Carr at Bloomberg here, that's a great article. I wouldn't be surprised if a documentary is made from it.
 

Einherjer

Attempted to circumvent ban with alt account
Banned
Oct 27, 2017
2,924
Germany
He even could have gotten away with it if not for all those stupid amateurish mistakes.
 

TheChrisGlass

Member
Oct 25, 2017
5,606
Los Angeles, CA
The smartest thing the guy did was to steal his coworkers passwords, so everyone looked equally guilty and it muddied the waters.

But Jesus Christ... the dude made a CAREER out of using a few credit cards? Like, I TOTALLY get how they aren't tracking it properly, but BUYING A HOUSE with this dirty money?

I feel guilty using $5 gift cards I find laying around my job sometimes.
 

Saturday

One Winged Slayer
The Fallen
Oct 27, 2017
6,376
It is interesting to see the foresight he used in this scheme; mixing bitcoin with other currencies to launder it, for instance- but then making very upfront purchases like lakefront property seems reckless, to say the least

I dunno, we have the ability of hindsight now that it's all said and done but surely he must have known that he was a timer the moment he used this exploit in a environment limited only to testers, right?
 

Chromie

Member
Dec 4, 2017
5,241
Washington
He exploited a bug in their system, though you're right that he should've known he would have been found out sooner or later.

His argument that this is all fake money so he shouldn't be prosecuted, and then the prosecutor saying that the house he bought and all the crap he bought is real, is a classic moment though.

Amazing.
 

spman2099

Member
Oct 25, 2017
10,892
Hope his cell has windows

tenor.gif
 

JumbiePrime

Member
Feb 16, 2019
1,892
Bklyn
When I see stories like this I wonder would they have gotten away with it if they just stopped earlier..like let's say at 5 mil. At that point just living off of safe investments and intrest should be quite comfortable
 

MaulerX

Member
Oct 30, 2017
2,693
I never understand people that do shit like this. It's bad enough that they do it to begin with. But greed is always their downfall. They just don't know when to stop.
 

flyinj

Member
Oct 25, 2017
10,953
In the mid-2000s, the company's original Xbox gift card system was denominated in virtual points rather than dollars, making their actual value bewildering. Walt Mossberg, then the Wall Street Journal's tech columnist, wrote in a 2006 review that the "deceptive" system required 79 Xbox Live Points to buy a song for Microsoft's Zune media player, even though those 79 points cost 99¢, a point-to-penny ratio that fluctuated depending on where and how many you prepurchased.
A former top Microsoft e-commerce manager familiar with the system says this opacity was intentional. "The marketing requirement was: Don't make the points equal to currency. If it's a penny a point, it's too easy for customers to just do the math in their head," this manager says. The idea seems to have been that if consumers couldn't quite grok what points were worth, they were more likely to spend it like play money. To further boost spending, the company initially offered points only in bulk "lots" of at least $5, meaning you couldn't download a song without having a bunch of points left over. The pricing system left Microsoft open to shrewd traders who started reselling Xbox points, which was one reason, according to a former product leader, that the company switched in 2013 to gift cards based on what they termed "currency stored value," or CSV: a $20 Xbox gift card is now worth $20.



I love that their cynical bullshit "points" system eventually bit them in the ass
 

Pargon

Member
Oct 27, 2017
12,014
So he made over $10M but only has to pay back $8.3?
Sure, he has been sentenced to prison for nine years, but he'll probably get out in half that time.
 

spman2099

Member
Oct 25, 2017
10,892
Man, reading the details of that... he probably would have gotten away with it if he hadn't been so incredibly sloppy. Also, once the codes started being flagged, that was a clear sign to stop. So greedy.

Too bad, he had a good thing going.
 

boontobias

Avenger
Apr 14, 2018
9,539
He'll eat those 5-7 years then come out with his bitcoin wallet quadrupled and run away somewhere. Lol nah he's screwed. good
 
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Golbez

Member
Oct 20, 2020
2,460
The Bloomberg article is amazing.

Several galaxy brain moves by the dude but registering even the Office license to his personal website was just *chef's kiss*.
 

ConanEdogawa

Member
Oct 31, 2017
1,082
This just reminds me of those shady gray-market sites that get promoted for selling cheap codes for games and digital store credit. Have to question where a lot of those come from, and schemes like this.

He'd sell them in bulk at a relative discount, which buyers would then go on to sell to folks who wanted to use the codes.
 

Bucéfalo

Banned
May 29, 2020
1,566
Was there any chance for him to stay under the radar? Let's say scamming 200k per year? Dude just had to be patient during 5 years. You can live pretty comfortable in many countries with 1M dollars.
 

unapersson

Member
Oct 27, 2017
661
"We'll never catch him, this guy's a genius"... junior level employee skids into car park in a bright red Ferrari.
 

cjelly

Member
Oct 27, 2017
6,260
So he made over $10M but only has to pay back $8.3?
Sure, he has been sentenced to prison for nine years, but he'll probably get out in half that time.
He's gonna come out of jail bankrupt and with a criminal record. No employer is gonna touch him with a barge pole.

His life is fucked.
 

Pargon

Member
Oct 27, 2017
12,014
He's gonna come out of jail bankrupt and with a criminal record. No employer is gonna touch him with a barge pole.
His life is fucked.
Of course - I didn't mean to suggest otherwise.
But it seemed weird that he might still come out of this with $2M to his name - which is more money than I'll see in my lifetime.

Reading the article though, it sounds like the cards' value was $10.1M, while he was obviously selling them at a discount.
It's not that he made $10.1M from selling the cards - so I suppose that explains why he was ordered to make restitution of $8.3M.
 

JershJopstin

Member
Oct 25, 2017
5,332
I mean he should have known they track metrics with these things..certainly he wasn't the only one, just stupid enough to take 10 million worth. RIP buddy.
He did know, based on the measures he used to circumvent said tracking. He just missed a small point or two.
When I see stories like this I wonder would they have gotten away with it if they just stopped earlier..like let's say at 5 mil. At that point just living off of safe investments and intrest should be quite comfortable
It reads as if he was caught by the stuff he did early on. At 5M he likely would've been caught just the same; Microsoft knew something was up before he cashed in for the Tesla and the house.
 

Madjoki

Member
Oct 25, 2017
7,230
Of course - I didn't mean to suggest otherwise.
But it seemed weird that he might still come out of this with $2M to his name - which is more money than I'll see in my lifetime.

Reading the article though, it sounds like the cards' value was $10.1M, while he was obviously selling them at a discount.
It's not that he made $10.1M from selling the cards - so I suppose that explains why he was ordered to make restitution of $8.3M.
Some of cards were canceled before they got redeemed. Also selling at discount.
 

cyrribrae

Chicken Chaser
Member
Jan 21, 2019
12,723
Of course - I didn't mean to suggest otherwise.
But it seemed weird that he might still come out of this with $2M to his name - which is more money than I'll see in my lifetime.

Reading the article though, it sounds like the cards' value was $10.1M, while he was obviously selling them at a discount.
It's not that he made $10.1M from selling the cards - so I suppose that explains why he was ordered to make restitution of $8.3M.
Plus, depending on when he cashed out of Bitcoin, maybe he doesn't even have that much left either XD. But who knows lol. Might just have been a laundering step that media is capitalizing on with the bad name of bitcoin atm lol