Microsoft Employee Busted for Fraud

A former Microsoft employee was arrested Monday for allegedly ordering software using Microsoft's internal purchasing system and selling it for personal gain.

Richard Gregg, 43, of Bellevue, Washington, is accused of ordering software worth $17 million and selling it or otherwise disposing of it and keeping the proceeds, instead of using the software for business purposes, the office of the U.S. Attorney for the Western District of Washington said in a statement.

Gregg was indicted on 62 counts of mail and computer fraud last week. He pleaded not guilty on Monday and was released on several conditions awaiting trial, said Executive Assistant U.S. Attorney John Hartingh.

Similar Case

Gregg worked as a project coordinator for Windows development at Microsoft, in Redmond, Washington. He was terminated by the software maker in December last year, at the same time another Microsoft employee, Daniel Feussner, was fired and arrested on similar charges.

Feussner was accused of selling $9 million worth of Microsoft software for his own profit. Facing a punishment of as much as 20 years in jail, he died on February 7 after ingesting antifreeze, according to published reports.

The Gregg and Feussner cases are separate cases, although the employer and circumstances are similar, Hartingh said. The investigation into fraud at Microsoft is ongoing, but no other charges are imminent, he said.

Both Gregg and Feussner allegedly abused an internal product ordering system at Microsoft known as MS Market. The system allows authorized employees to order Microsoft software and hardware at no cost for business-related purposes, according to the indictment of Gregg.

Microsoft has since changed its ordering system and is confident that the fraudulent activity has stopped, Microsoft spokesperson Stacey Drake said. There may be additional cases brought to the court, all dating from before 2002, she said.