Alleged Scheme Inspired by “Office Space”

According to charging documents filed by prosecutors, former Zulily software engineer, Ermenildo “Ernie” Valdez Castro, is accused of stealing over $300,000 from the company through multiple schemes, including one inspired by the 1999 movie “Office Space.”

Diverted Shipping Fees

Prosecutors claim that Castro altered the company’s code to divert shipping fees from Zulily customer purchases to a Stripe account controlled by him. Evidence against Valdez includes notes referring to the plan as the “OfficeSpace project.”

Double-Charging Customers

In addition to the diverted shipping fees, Castro is also accused of stealing money using a code that double-charged Zulily customers for shipping.

Manipulated Prices

The charges also claim that Castro manipulated the prices of items sold by Zulily and bought them for pennies on the dollar.

Claims of Awareness by Zulily

During an interview with police detectives, Castro claimed that Zulily was aware of these plans and that they were part of his role of conducting testing for the company, despite the funds going to his Stripe account.

Investment in GameStop Stock Options

When asked where the money is now, Castro stated it was “gone”. That he had used the money to invest in GameStop stock options. He denied purchasing any physical assets with the money.

Firing and Arrest

Zulily fired Castro on June 9, 2022, after the company investigated his price adjustment scheme. He was arrested on June 21, 2022, and charged last week with two counts of first-degree theft. First-degree identity theft. He is scheduled to appear in court for arraignment on January 26, 2023.

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