A former Zulily software engineer allegedly stole more than $300,000 from the company through multiple schemes, including one inspired by the 1999 movie “Office Space,” according to new indictment documents filed by prosecutors.
No, the alleged fraud did not involve a red stapler or printers broken in a field. Instead, prosecutors say that Armenianldo “Ernie” Valdez Castro of Tacoma, Washington, changed the code of the Seattle-based e-commerce company to divert shipping charges from Zulily customer purchases to a Stripe account under his control.
Evidence against Valdez includes notes in which he refers to the plan as an “OfficeSpace project”, citing a story from the cult classic movie, when an IT worker embezzled fractions of cents from individual transactions.
Seattle Police Detective Nicholas Kartes said in a probable cause certificate he confirmed that Castro “called his plan to steal money from Zulily after the movie” in an interview after Miranda waived his rights.
Castro, who joined Zulily in 2018, also allegedly stole money from some Zulily customers using the code that doubled the shipping cost.
Separately, according to the accusations, Castro also manipulated the prices of products sold by Zulily and bought them per dollar.
Speaking to police detectives, Castro claimed that although the funds went to his personal Stripe account, Zulily was aware of various elements of these plans and said they were part of his role as testing for the company.
He added probable cause-confirmation, “When asked where the money is now, he said it was ‘gone’. He explained that he used the money to invest in stock options, specifically GameStop stock options, and reiterated that all the money is now gone. He refused to buy any physical assets with that money.”
Zulily fired Castro on June 9 this year after he investigated the company’s price adjustment plan, according to court filings. The company later found evidence of the alleged shipping fee theft on his laptop.
According to court records, Castro was arrested on June 21. He was charged twice last week for first-degree theft and first-degree identity theft. He is scheduled to appear in court on January 26 to demand his arrest.
Founded in 2009, Zulily went public in 2013 and was acquired two years later for $2.4 billion by Qurate Retail Group, a West Chester, PA-based media giant made up of brands like QVC, HSN, and others.
Zulily’s revenue fell 39% in the third quarter to $200 million, Qurate reported earlier this month. According to LinkedIn, the company has more than 800 employees in the Seattle area.
Read the charging documentation below.
Former Zulily engineer accused of theft plot on Scribd allegedly inspired by GeekWire’s ‘Office Space’