Zadeh Kicks Proprietor and Chief Monetary Officer Charged in $85 Million Wire Fraud and Financial institution Fraud Conspiracy | USAO-OR

EUGENE, Ore.—The previous proprietor and chief monetary officer of Zadeh Kicks LLC, a now-defunct Oregon company that bought restricted version and collectible sneakers on-line, made their first appearances in federal courtroom in the present day after being charged with perpetrating a fraud scheme that allegedly value clients greater than $70 million in unfulfilled orders and defrauded monetary establishments out of over $15 million.

Michael Malekzadeh, 39, a Eugene resident, has been charged by prison data with wire fraud, conspiracy to commit financial institution fraud, and cash laundering. Bethany Mockerman, 39, additionally of Eugene, has been charged with conspiring with Malekzadeh to commit financial institution fraud. 

In response to courtroom paperwork, Malekzadeh began his enterprise in 2013 by buying restricted version and collectible sneakers to resell on-line. Starting as early as January 2020, Zadeh Kicks started providing preorders of sneakers earlier than their public launch dates, permitting Malekzadeh to gather cash upfront earlier than fulfilling orders. Malekzadeh marketed, bought, and picked up funds from clients for preorders understanding he couldn’t fulfill all orders positioned.

For instance, in 2021, Malekzadeh started promoting preorders of Nike Air Jordan 11 Cool Gray sneakers. Zadeh Kicks acquired and accepted preorder gross sales of over 600,000 pairs of sneakers, leading to funds to Malekzadeh of greater than $70 million. Malekzadeh had no means of buying the amount of sneakers wanted to fill the preorders acquired. Actually, he was solely capable of purchase simply over 6,000 pairs. Clients had been both left with unfulfilled orders or they acquired a mix refund of money and Zadeh Kicks reward playing cards.

By April 2022, Malekzadeh owed clients greater than $70 million in undelivered sneakers and unknown extra tens of millions held by clients in nugatory firm reward playing cards.

In her position as Zadeh Kicks chief monetary officer, Mockerman conspired with Malekzadeh to supply false and altered monetary data to quite a few monetary establishments—together with offering altered financial institution statements—on greater than 15 financial institution mortgage functions. Collectively, Mockerman and Malekzadeh acquired greater than $15 million in loans from these functions.

As a part of the federal government’s ongoing prison investigation, federal brokers have seized tens of millions of {dollars} in money and luxurious items that Malekzadeh acquired with the proceeds of his fraud. The seized objects embody practically 100 watches, some valued at over $400,000, jewellery, and a whole lot of luxurious purses. The federal government additionally seized practically $6.4 million in money which was the consequence Malekzadeh’s sale of watches and luxurious vehicles manufactured by Bentley, Ferrari, Lamborghini, Porsche, and others.

Malekzadeh and Mockerman are cooperating with the federal government’s investigation, together with the seizure of property described above. Each made their first appearances in federal courtroom in the present day earlier than U.S. Justice of the Peace Choose Mustafa T. Kasubhai and had been launched situations pending additional courtroom proceedings.

When you or somebody you understand had been a Zadeh Kicks buyer with unfulfilled orders or in any other case consider you had been defrauded by Malekzadeh or Mockerman, the FBI desires to listen to from you. Please go to FBI.gov/ZadehKicks to finish a quick on-line questionnaire. Your voluntary responses will help with the FBI’s ongoing prison investigation and assist to establish you as a possible crime sufferer. Based mostly in your responses, chances are you’ll be contacted by the FBI for extra data.

This case is being investigated by IRS–Prison Investigations, FBI, and Homeland Safety Investigations (HSI) with help from the Oregon Mental Property Job Power. Assistant U.S. Attorneys Gavin W. Bruce and Quinn P. Harrington are prosecuting the case. The associated asset seizures and forfeitures are being dealt with by Assistant U.S. Legal professional Katie de Villiers and the U.S. Legal professional’s Workplace’s Asset Restoration and Cash Laundering Division.

A prison data is barely an accusation of against the law, and defendants are presumed harmless except and till confirmed responsible.

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