Mar 28, 2022 13:45:00

Whistleblowers accused Microsoft of getting over 24 billion yen in fraudulent funds annually, revealing methods such as over-licensing and disguised purchase orders

by

Mike Mozart

Yasser Elabd, a senior director at Microsoft, posted a complaint about Microsoft's fraud on the whistleblower platform Liones . According to the accusation, Microsoft was getting at least $ 200 million a year (about 24.6 billion yen) through fraudulent methods such as over-licensing and fraudulent purchase orders. In addition, the involvement of government officials from multiple countries has been reported.

Microsoft is using illegal bribes in the Middle East and Africa. Why is the SEC turning a blind eye?
https://www.lioness.co/post/microsoft-is-using-illegal-bribes-in-the-middle-east-and-africa-why-is-the-sec-turning-a-blind-eye

Since joining Microsoft in 1998, Elabd has signed contracts with public institutions in the Middle East and Africa, and has built a product sales team in sub-Saharan Africa for $ 15 million in 2003. He is a person who has made many achievements such as generating more than 1.84 billion yen). Mr. Elabd's work included monitoring the transfer of funds of Microsoft's product sales licensing program ' Licensing Solution Partner (LSP) '.

Elabd, who was monitoring the transfer of funds between LSP and Microsoft, discovered a request from a partner in one African country for $ 40,000 in the name of 'accelerating transaction closing' in 2016. Did. However, the company listed as a business partner in the request is not on Microsoft's potential customer list, and the person requesting the funds is the person who was dismissed from Microsoft four months ago due to poor sales performance or policy violation. did. Microsoft has banned former employees within six months of retirement from working as partners and was not eligible to claim funding from that person. Distrustful of this, Elabd asked 'Microsoft services architect' why he didn't go through the department 'Microsoft Services' to solve this kind of problem, but he didn't get a clear explanation. did.

Dissatisfied with the explanation, Elabd reported the problem to the Legal and Human Resources departments and stopped offering $ 40,000. However, the legal and human resources departments did not investigate the details of the former employee who requested the funds. Later, Elabd's new boss manager told Elabd, 'Our job is to make more money for Microsoft. We don't want you to get in the way. Partners in the Middle East and Africa. If you're doing something, you have to leave it alone. ' Questioning this statement, Elabd asked his manager's boss, Vice President, to hold a meeting, which was ignored. For this reason, Elabd sent an email to Microsoft executives, including CEO Satya Nadella, explaining the circumstances of the problem.

After sending an email to the CEO and executives, Elabd was summoned by the aforementioned vice president and told, 'It's like you booked a one-way ticket from Microsoft.' After that, Mr. Elabd was unable to participate in important transactions and was dismissed in June 2018. 'It was a big shock given my achievements and long tenure,' said Elabd. At the time of his dismissal from Microsoft, Elabd said he didn't know the details about Microsoft's fraud. However, in 2020, a former Microsoft colleague sent an email detailing corruption, and an audit conducted by PricewaterhouseCoopers revealed details of multiple frauds.

One of the frauds is as follows. First, the 'customer representative' signs a discount contract with Microsoft or LSP. After that, the person in charge reports the amount to which the discount is not applied to the company / organization to which he / she belongs and has Microsoft pay it, and Microsoft / LSP / person in charge reports the 'difference between the regular charge and the discount charge' caused by this. That's why it will be distributed. According to Elabd, the 'person in charge' involved in the fraud was primarily government officials. Elabd said the fraud resulted in $ 13.6 million in transactions with the Saudi Arabia Ministry of Interior and $ 20 million in transactions with Kuwait and Saudi Arabia for Microsoft and its customers. Claims to have passed to the person in charge of.

In addition, the fraudulent 'charge the fee for the license that is not actually used' was rampant. For example, the Nigerian government was 'paying a Microsoft license fee of $ 5.5 million for hardware it doesn't own.' According to Elabd, Microsoft will check the number of hardware that needs to be licensed in normal transactions, so similar problems cannot occur. In other words, it is suspected that the person involved in the transaction intentionally reported a large number of hardware units. Many other similar techniques have been implemented, and it is said that Qatar's Ministry of Education paid $ 9.5 million a year for licenses for Windows and Office that are not used.

At Microsoft, the fraud of 'creating a fake purchase order' was also rampant. According to Elabd, in 2017 Microsoft's sales manager was creating a purchase order disguised as the signature of the Saudi Arabian National Guard 's deputy minister. In addition, Elabd said, 'We have evidence that Microsoft's Legal, Human Resources, Treasury, and Public Institution officials knew about forged purchase orders.'

Elabd estimates that Microsoft is getting at least $ 200 million a year in fraudulent funding from the multiple frauds mentioned above. Also. 'From my experience, I estimate that 60% to 70% of sales representatives and managers in the Middle East, Africa and Europe receive fraudulent funds, and the government of Ghana, Qatar, Saudi Arabia, Zimbabue and Nigeria. Stakeholders have also received funding related to Microsoft fraud, 'he said, emphasizing the depth of the problem.