A Tacoma man was fired from his software engineering job at Zulily after stealing hundreds of thousands of dollars from the Seattle-based e-commerce company using a scheme inspired by the 1999 cult classic film, "Office Space," according to prosecutors.
Ermenildo "Ernie" Castro, 28, was charged last week with two counts of first-degree theft and first-degree identity theft, court records show. He's accused of editing programming code to siphon shipping fees and manipulate Zulily prices, stealing about $260,000 in electronic payments and more than $40,000 in merchandise, according to charging papers.
The company's loss in the alleged scheme exceeded $300,000, charging papers say.
Hired by Zulily in late 2018, Castro worked as a software engineer for the online retailer's "Shopping Experience" team, the charges say. Starting in February 2022, Castro "inserted three types of malicious code in the checkout process" to steal from the company and its customers, a Seattle police detective wrote in charging papers.
After Castro was fired June 9, a Zulily examination of his work laptop uncovered a document titled "Office Space project," outlining his scheme to rewrite code to steal shipping fees charged to customers, according to the charges. Police say he later confirmed "that he named his scheme to steal from Zulily after the movie," according to charging papers.
In "Office Space," lead character Peter Gibbons (Ron Livingston) and two software engineers retaliate against corporate downsizing and their bosses' mistreatment by introducing a computer virus into their company's banking system. Though the virus is meant to divert fractions of pennies from a large number of transactions into Gibbons' bank account, something goes wrong and the virus steals $300,000 immediately, guaranteeing the theft will be discovered. A red stapler, a beatdown on a malfunctioning printer, and a suspected arson that burned the company to the ground helped turn the satire on workplace misery into a cult classic.
In the case against Castro, charging papers say Zulily employees discovered discrepancies in March between what some customers were billed and the amounts charged to their credit cards. The charges allege Castro, in response, modified code to prevent the discrepancies, which he had initially created to steal shipping fees from the business, from continuing. Then, in April, he again modified Zulily coding, causing some customers to be double charged for shipping and handling, according to the charges.
Half of those fees went to Zulily and half were siphoned into Castro's private account with the credit card payment processing company used by Zulily, then transferred into his bank accounts, charging papers say.
The scheme affected more than 30,000 Zulily transactions between February and June, according to the charges. Police say Castro told detectives he used the stolen money to invest in stock options and that "the money is now gone," according to the charges.
Castro is also accused of purchasing 1,294 Zulily items at heavily discounted rates, often for pennies on the dollar, paying a little over $250 for merchandise worth $41,000, the charges say. Most were shipped to Castro's Tacoma address, though some items were sent to a La Conner, Skagit County, woman Castro briefly dated, according to the charges.
Members of Zulily's corporate security team went to Castro's address and photographed several boxes with Zulily labels "piled outside of the home's front door and driveway," and turned the photos over to Seattle police, the charges say.
When Seattle police searched Castro's house in June, the charges say officers found "an exorbitant number" of the 1,000 items Castro had shipped to himself, some in their original packaging with shipping labels attached. For instance, Zulily records showed Castro paid $1 for a sofa bed that had a retail price of $565.99, say the charges.
Castro has been ordered to appear for arraignment on Jan. 26, court records show. The records do not indicate which defense attorney is representing him.