News

Former Microsoft Program Manager Accused of Stealing +$1M

• By Becky Nagel
• December 11, 2007

Gudmundson, who lives in Kirkland, Wash., is accused of stealing more than $1 million from Microsoft and two of its business partners -- Expedia and a Calif.-based domain acquisition service, Marksman -- between 2000 and 2004, allegedly using exaggerated expense reports, among other methods.

As part of her duties at MSDN, Gudmundson was responsible for acquiring and renewing numerous domain names for the company as well as for Expedia -- charges she put on a personal credit card and then submitted for reimbursement.

According to a grand jury indictment released Thursday, Gudmundson is accused of taking money in three main ways:

• Submitting inflated expense reports using either doctored copies of receipts or no receipts.
• Getting reimbursed for Expedia domain names that were already paid for through an agreement with Microsoft and Expedia.
• Having purchase orders created for a "G.M. Lossman," whose address matches that of Gudmundson's mother's house in Kirkland, for domain names Microsoft already owned. The government alleges that checks made out to Lossman from a domain-name service vendor, Marksman, were often delivered directly to Gudmundson and deposited into a personal bank account to which Gudmundson had access.

The indictment lists 11 wire transfers totaling around $540,000 between 2000 and 2001 from Microsoft, and seven checks from Expedia and Marksman totaling slightly more than $250,000, mailed in 2003. A spokesperson for the U.S. District Attorney's office in Seattle said that not everything is in the indictment, and prosecutors on the case will be "prepared in court to show that the total losses...are more than $1 million."

Gudmundson's attorney, C. James French of Seattle-based Cable, Lagenbacih, Kinerk Bauer, said in an interview this afternoon that the idea of more charges not listed in the indictment "just seems odd" -- one of the many issues he has with it.

"For one thing, some of these things she was asked to do by her employer...she didn't just buy the Expedia domains, she was told to," he commented.

French said there are also significant discrepancies over the total money involved, what are legitimate expenses, and said that his client had already reimbursed Microsoft $30,000 back in 2004: "We would have hoped that would have [settled the issue]...obviously it didn't."

French would not comment on other aspects of the charges except to say that they are still investigating them. He said Gudmundson plans to plead not guilty at her arraignment on Dec. 13.

Gudmundson is free on a promise to appear in court -- no bond was required.

According to the U.S. Attorney spokesperson, the case was investigated by the U.S. Post Office for "about a year," following an internal investigation by Microsoft.

Wire and mail fraud can be punishable by a maximum of 20 years in prison and/or a $250,000 fine.