When something appears too good to be true, it usually is. That is the case with an Oregon-based sneaker swindler who promised ultra rare kicks at below-average prices.
Michael Malekzadeh, 39, ran his Zadeh Kicks LLC for nearly a decade before it all fell apart. Bloomberg reports that one sneaker, in particular, the Air Jordan 11 Retro Cool Grey led to the company’s downfall.
According to the Department of Justice, Malekzadeh accepted more than 600,000 pre-orders for the Cool Grey 11s. He offered the highly sought-after sneakers for as low as $115 when the retail price was $225.
Malekzadeh raked in more than $70 million on the pre-orders with no possible way to fulfill the demand. He was only able to actually get his hands on about 6,000 pairs.
Instead of sneakers, some customers were out completely, while others were offered cash and Zadeh Kicks gift cards. It’s estimated that thousands of victims were duped. One victim, Jeremy Rogers, told Bloomberg that he believes he spent about $143,000 on sneakers he never received.
Malekzadeh was charged with wire fraud, conspiracy to commit bank fraud, and money laundering. He pleaded not guilty to all of the charges last week. If convicted on the top count, the “Bernie Madoff of sneakers” could spend 30 years in prison.
“Mr. Malekzadeh is not hiding from his conduct,” said Malekzadeh’s attorney, Joanna Perini-Abbott. “He has consistently taken full responsibility for his actions and will continue to do so.”
Bethany Mockerman, Malekzadeh’s fiancee and the company’s Chief Financial Officer for the company, is also facing charges. Mockerman, 39, was charged with conspiring to commit bank fraud.
The FBI has seized $6.1 million in cash, nearly 100 watches, jewelry, and about 1,100 pairs of sneakers from Malekzadeh’s personal collection. According to a court-appointed receiver, his warehouse still holds about 60,000 pairs of sneakers.
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