In the wake of his arrest for stealing and distributing trade secrets from Microsoft, a former employee has pled guilty to the crime as part of a plea bargain for a lighter sentence. Alex Kibkalo had been facing up to 10 years in federal jail and a fine of up to $250,000 in a case that was clear-cut and easily proven.
Kibkalo, who worked for Microsoft in Russia and then Lebanon, had become disgruntled after a poor performance review and began leaking information about upcoming Microsoft products to an individual identified as a "blogger." In 2012, he leaked information about then-upcoming updates to Windows RT, and, more problematic, he stole and then distributed an SDK for Microsoft's product activation software. Kibkalo and the "blogger"—who was also outside the United States—then hatched a harebrained scheme to use that software to create a virtual activation server outside of Microsoft and distribute Windows 8 product keys via eBay.
Tipped off by an outside source to this activity, Microsoft began examining the employee's Hotmail- and Windows Live Messenger-based communications records and determined a crime had been committed. The employee confirmed his activities to Microsoft, and the firm then alerted federal law enforcement.
(Microsoft's internal investigation of Kibkalo raised some privacy issues, and though the firm acted lawfully, it eventually agreed to change its policies and will no longer directly access the contents of its own services when it suspects a crime has been committed.)
You can read more about Kibkalo's crimes in Ex-Microsoftie Arrested for Pirating Windows Activation Software. It is a fairly lurid tale,
The plea bargain was disclosed Monday. Kibkalo and federal prosecutors have agreed to a recommended three month federal prison term and a fine of $22,500, which Kibkalo will pay to Microsoft. The sentencing is set for July 1, and it's always possible that the judge overseeing the case could exceed those recommendations.
