Zadeh Kicks Founder Sentenced to 70 Months for Sneaker Fraud
(Bloomberg) — The founder of sneaker retailer Zadeh Kicks has been sentenced to almost six years in prison for a fraud conspiracy that led to the online platform’s infamous collapse and $80 million in losses to customers and financial institutions.
Michael Malekzadeh, 42, was sentenced to 70 months behind bars in Eugene, Oregon, on Tuesday and was ordered to forfeit more than $15 million in assets, federal prosecutors said in a statement. Malekzadeh pleaded guilty last year to wire fraud and bank fraud.
The sentencing signaled the end of a case that sent shockwaves through the sneaker sales market, which reached record levels during the 2020 pandemic. Malekzadeh took this rise to incredible heights, offering sought-after shoes at competitive prices from his Oregon warehouse before manufacturers even released them.
Malekzadeh’s lawyer did not immediately respond to a request for comment.
According to the U.S. Attorney’s Office in Oregon, Malekzadeh “advertised, sold, and collected payments from customers for pre-orders, knowing that he could not fulfill all orders placed.” In total, he owed customers more than $65 million in unfulfilled orders and defrauded financial institutions of the $15 million they gave him, according to court records.
Prosecutors said Malekzadeh used the money to finance a lavish lifestyle. Agents seized luxury watches, jewelry and hundreds of bags during the investigation, according to court documents.
Malekzadeh and his partner, chief financial officer Bethany Mockerman, agreed to pay full restitution to the victims as part of their plea agreement. The judge set the extradition hearing for March 31.
The government announced that $7.5 million was obtained from the sale of Malekzadeh’s house in Eugene, his watches and luxury cars produced by Bentley, Ferrari, Lamborghini and Porsche.
In a separate case, Zadeh Kicks and all of its sneakers, which Malekzadeh founded in 2013, were taken over by a court-appointed receiver tasked with liquidating its assets.
The case is United States v. Malekzadeh, 22-cr-262, U.S. District Court, District of Oregon (Eugene).
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