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Former Microsoft employee Carolyn M. Gudmundson, has been charged with defrauding the company of $1 million and will plead not guilty her attorney said.

Gudmundson is charged with 11 counts of wire fraud and seven counts of mail fraud from a number of transactions she allegedly did to divert payment for Microsoft and Expedia Internet domain names to herself.

While a program manager at Microsoft she used her Microsoft corporate American Express card to pay for the purchase, registration and renewal of Internet domain names. She falsified credit-card receipts to show she paid higher prices and used them to support "false and fraudulent amounts claimed on her reimbursement request to Microsoft," the U.S. Attorney's Office said.

In addition she allegedly became an Expedia vendor and submitted invoices to that company, payable to herself, for domain-name registrations that had previously been paid through and agreement between Microsoft and Expedia.

The indictment also alleges that Gudmundson asked Microsoft to reimburse Marksman, a company that buys domain names for private parties, for domain purchases it made on behalf of Microsoft. She then requested Marksman send checks to a bogus person named G.M. Lossman, who lived at the same address as Gudmunson's mother.

The indictment said checks and wire transfers were deposited to accounts in Gudmunson's mothers name and her own. It lists 18 transactions, by wire and mail between June 29,2000 and January 22,2004. The amounts ranged from $13,620 to $112,295 and totaled $797,362.

Assistant U.S. Attorney Kate Crisham believes they have a strong case against Gudmunson. "I think that we can prove in the trial that the amount of loss to Microsoft was over $1 million," she told the Seattle Times.

Gudmundson faces up to 20 years in prison and a $250,000 fine if convicted.