Ex-Microsoft Manager Pleads Guilty, Sentenced For Embezzlement

Former Microsoft domain manager Carolyn Gudmundson pleaded guilty to submitting false expense claims for buying and registering domain names to the tune of $1 million, according to sentencing records from the U.S. District Court in Seattle.

Microsoft had no comment on the case.

Gudmundson was ordered to serve 22 months in prison and pay restitution of $923,641 to the Redmond, Wash.-based Microsoft.

Gudmundson pleaded guilty to a total of 18 counts: 11 counts of wire fraud and seven counts of mail fraud. Gudmundson was originally indicted in December 2007.

According to court documetns, Gudmundson worked at Microsoft from 1987 to 2004 and was the sole person responsible for maintaining Microsoft's some 14,000 domain names, as well as the myriad domain names owned by the Expedia travel site. Gudmundson resigned after Microsoft discovered her transgressions.

Court papers said that beginning in June 2000, Gudmundson began submitting fraudulent travel and expense reports to Microsoft for reimbursement. She had previously been authorized by her manager to use her Microsoft corporate American Express card to expedite the purchase of domain name registrations, renewals, transfers and acquisitions.

She electronically submitted travel and expense reports to for reimbursement of expenses, incurred using her American Express card that were "purportedly associated with these transactions," according to the U.S. Attorney's office, which said that she submitted her reimbursement requests without the original American Express card receipts attached, and instead attached copies of those receipts.

To support the fraudulent amounts claimed on her reports, Gudmundson altered the dates and amounts of a number of her American Express card receipts to make it appear as if she had incurred significantly greater costs in connection with domain name registrations, renewals, and acquisitions than she actually had, according to court papers. After receiving these fraudulent reports, Microsoft wired money that was intended to reimburse her into her personal bank account. "All told, from June 29, 2000, to December 4, 2001, [Gudmundson] received reimbursement in the amount of $770,170.60 pursuant to this fraudulent scheme," the U.S. Attorney's office charged.

Gudmundson also pleaded guilty to fraudulent reimbursement requests to Expedia, a former subsidiary of Microsoft. The court said that on four occasions Gudmundson falsely told Expedia that she had used her personal American Express card to register certain domain names on Expedia's behalf, and then submitted fraudulent invoices to Expedia for reimbursement of expenses that she had never actually incurred. In fact, the domain names that Gudmundson claimed she had registered on Expedia's behalf had previously been paid for by Microsoft. As a result of the fraud, Gudmundson netted $100,528.85 from Expedia. When Microsoft discovered the fraud it repaid Expedia $100,528.85.

Before sentencing, Gudmundson and several friends submitted letters to the judge asking for leniency. Gudmundson said she was devoted to her two daughters, that her husband is divorcing her and seeking custody of the children and that she is losing her house.

"As I think about what I have done, it is devastating," Gudmundson said in her statement. "I cannot express in words the remorse I have. ...I know right from wrong and I knew better. I am asking for a second chance. My daughters need me and I need them."

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