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FORMER MICROSOFT EMPLOYEE SENTENCED TO 22 MONTHS FOR FRAUDULENT BILLING SCHEME
Program Manager Submitted Fraudulent Expense Reports and Invoices to Microsoft and Expedia

FOR IMMEDIATE RELEASE
July 18, 2008

CAROLYN M. GUDMUNDSON, 46, of Kirkland, Washington, was sentenced today in U.S. District Court in Seattle to a term of 22 months imprisonment, three months of supervised release, and $923,641 in restitution for Mail Fraud. GUDMUNDSON pleaded guilty in January 2008, to a scheme in which she fraudulently billed her employer and related entities for reimbursement for costs she had purportedly incurred in registering and maintaining Internet domain names for Microsoft and Expedia. At sentencing U.S. District Judge Ricardo S. Martinez stated Defendant had lost her home, job and family as a result of her criminal activity. He also noted that“the Court is cognizant of the importance of the deterrent effect of this sentence,” and stated that “other employees who have similar opportunities to place their hands in the corporate till need to understand that society takes this sort of crime very seriously.”

According to records filed in the case, GUDMUNDSON was employed by Microsoft as a Program Manager in Microsoft’s MSN Division. Between 2000 and 2004, GUDMUNDSON was responsible for registering, transferring, renewing, acquiring and retiring Internet domain names for Expedia and Microsoft. During the course of this part of her job, GUDMUNDSON defrauded Microsoft in three ways. First, GUDMUNDSON was authorized to use her personal credit card to purchase, renew and acquire Microsoft’s domain names and then submit reimbursement requests to Microsoft. GUDMUNDSON altered the credit card receipts she submitted so that they showed a much higher price for the purchase, renewal and acquisition of domain names than she actually had paid, and then used these altered credit card receipts to support the false and fraudulent amounts claimed on her reimbursement requests to Microsoft. Second, GUDMUNDSON allegedly submitted invoices to Expedia for the registration of domain names that she had not paid for. Third, GUDMUNDSON used an outside company that assists in the negotiation for the purchase of domain names from private parties. GUDMUNDSON told an employee of that company that a fictitious individual had purchased domain names in his name on Microsoft’s behalf and that she needed the employee to send a check to that individual to reimburse him for his costs. GUDMUNDSON then directed the employee to send the checks to her, where she allegedly deposited them into a bank account that she controlled.

Urging the court to impose prison time, Assistant United States Attorney Kate Crisham wrote in her sentencing memo that “Microsoft trusted that Defendant’s reimbursement requests . . . would truthfully and adequately delineate the expenses Defendant had actually incurred in connection with her job,” and that GUDMUNDSON “responded to the trust Microsoft placed in her by flagrantly and deliberately abusing that trust, submitting fraudulent reimbursement requests, accompanied by altered American Express receipts, to the tune of almost $1 million.”

Judge Martinez expressed concern about the effect of incarceration on GUDMUNDSON’s two young daughters saying, “your entire family and especially your daughters are victims of this crime.”

The case was investigated by the US Postal Inspection Service. The case was prosecuted by Assistant United States Attorney Kate Crisham.

For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110.

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