Kirkland woman senteced to 22 months, ordered to repay nearly $1 million, for embezzlement scheme

*Editor's note: This story is adapted from a news release submitted by the U.S. Attorney's Office, Western District of Washington.


A Kirkland woman who embezzled nearly $1 million from Microsoft in her job as a program manager was sentenced today to 22 months in prison and three months of supervised release.

As part of the terms of her sentence, Carolyn Gudmundson, 46, was also ordered to repay the $923,641 she acquired through a fraudulent billing scheme.

Gudmundson pleaded guilty in January 2008 to fraudulently billing Microsoft and other organizations associated with her job for costs she said she incurred in registering and maintaining Internet domain names for Microsoft and Expedia. At sentencing, U.S. District Judge Ricardo Martinez told Gudmundson she had lost her home, job and family as a result of her criminal activity, a news release stated. 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 responsible for registering, transferring, renewing, acquiring and retiring Internet domain names for Expedia and Microsoft in her position as a program manager in Microsoft’s MSN Division from 2000 and 2004.

Gudmundson's embezzlement scheme was sophisticated and multi-pronged. Authorized to use her personal credit card to purchase, renew and acquire Microsoft’s domain names, she altered the credit card receipts used for reimbursement to show a much higher price than she had actually paid. She also allegedly submitted invoices to Expedia for the registration of domain names for which she had not paid.

Her third tactic involved using an outside company that assists in the negotiation of the purchase of domain names from private parties. Gudmundson allegedly convinced an employee of the company that a third party, whom she fabricated, had purchased domain names on Microsoft’s behalf and needed to be reimbursed for the expense. Gudmundson then had the checks sent to herself and allegedly deposited them into a personal bank account.

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 also expressed concern about the effect jail time would have on Gudmundson's two young daughters, the news release stated.

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