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July 18, 2008 3:02 PM

Former Microsoft employee gets 22 months for fraud scheme

Posted by Benjamin J. Romano

Seattle Times business reporter Isaac Arnsdorf filed this dispatch on the sentencing today of Carolyn M. Gudmundson:

Carolyn M. Gudmundson, the former Microsoft employee who pleaded guilty in January to embezzling about $1 million, was sentenced in federal court today to 22 months in prison.

The 44-year-old Kirkland woman will also serve three years of suspended release and repay Microsoft some $923,000 in restitution.

A Microsoft employee from 1987 to 2004, Gudmundson became a program manager in the MSN division in 2000, charged with acquiring, registering and renewing Internet domain names. In that post, over the next three years, Gudmundson used her personal credit card to make payments, then altered her American Express receipts to overstate her expenses and collect higher reimbursements, the U.S. attorney said.

She also submitted invoices to Expedia, payable to herself, for domain-name registrations that had already been paid through an arrangement between Microsoft and Expedia.

In another scheme, she asked Microsoft to reimburse a Glendale, Calif., company for domain names it supposedly bought on Microsoft's behalf, many of which Microsoft already owned. In turn she told that company to send checks to her mother's address, the U.S. attorney said in court.

Through Gudmundson's plea bargain, the U.S. Attorney agreed to dismiss 17 other counts of wire and mail fraud. The sentencing had been delayed three times, originally scheduled for April, as the parties disagreed over how to calculate the damages.

The sentence, issued by U.S. District Judge Ricardo Martinez, was lower than the U.S. attorney's recommendation of 27 months and the Probation Office's recommendation of 36 months. Martinez said he would give Gudmundson the benefit of her plea bargain.

Gudmundson, choking back tears throughout Friday's hearing, will report to serve jail time after Sept. 15 so she can be with her two daughters through the start of the school year.

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