Richard Gregg, 43, of Bellevue, Washington, is accused of ordering software worth $17m (£10.2m) and selling it or otherwise disposing of it and keeping the proceeds, instead of using the software for business purposes, according to the office of the US Attorney for the Western District of Washington.
Gregg was indicted on 62 counts of mail and computer fraud last week. He pleaded not guilty on Monday and was released on bail awaiting trial, said executive assistant US attorney John Hartingh.
Gregg worked as a project co-ordinator for Windows development at Microsoft. He was laid off by the software maker last December, at the same time another Microsoft employee, Daniel Feussner, was fired and arrested on similar charges.
Feussner was accused of selling $9m worth of Microsoft software for his own profit. Facing a punishment of up to 20 years in jail, he died on 7 February after ingesting antifreeze, according to published reports.
The Gregg and Feussner cases are separate cases, although the employer and circumstances are similar, Hartingh said. The investigation into fraud at Microsoft is ongoing, but no other charges are imminent, he added.
Both Gregg and Feussner allegedly abused an internal product ordering system at Microsoft known as MS Market. The system allows authorised employees to order Microsoft software and hardware at no cost for business-related purposes, according to the indictment of Gregg.
Microsoft has since changed its ordering system and is confident that the fraudulent activity has stopped, Microsoft spokeswoman Stacey Drake said, adding that there may be additional cases brought to the court, all dating from before 2002.
Joris Evers writes for IDG News Service