A month after one of the biggest fraudsters in the history of sports shoes was accused of orchestrating a multi-million dollar fraud scheme, the US Justice decided to undertake the task of auctioning off thousands of products to recover, at least, part of the obtained.
In total, there are 59,780 pairs of 100% new tennis shoes that Michael Malekzadeh, a man known as the “Bernie Madoff of sneakers”obtained by scamming customers online.
The auction includes 48,340 pairs of Nike brand, 4,745 Yeezy brand and 4,625 Adidas brand.
Before that, 1,100 pairs from Malekzadeh’s personal collection will be sold, in this case, many new and some used, according to information from Bloomberg.
Specialists say that even if all of Malekzadeh’s shoes are sold, it is highly unlikely that the proceeds will cover what is owed to the thousands of victims.
More than half of Nike’s pairs are the highly coveted Air Jordans.
They sell 60 thousand pairs of Adidas, Yeezys and Nike
Malekzadeh founded a sneaker resale company called “Zadeh Kicks” in 2013. The firm, over time, became very popular as a place to reserve sneakers announced months before their official release date.
The strategy was based on prices considerably lower than their market value and if the pre-release sneakers never came to fruition, Malekzadeh would offer store credits in favor of customers.
It is not clear how Malekzadeh managed to obtain the exclusive sneakers before. One version says that he had some kind of connection with a high-ranking Nike employee, another that he was somehow connected to smaller retailers.
Beyond the inexplicable way in which the shoes were achieved, the truth is that they were completely original, since they passed all the third-party authentication services in StockX and GOAT.
But one day in May 2022, the 19th, the business model seems to have collapsed. Malekzadeh took the web offline, asked to dissolve the company and left social media.
In the presentation before the Court, “Zadeh Kicks” says it “experienced exponential growth in the business” from January 2020 to May 2022, primarily due to early orders, and was unable to sustain them due to difficulties related to “internal systems and processes.”
The truth is that due to the strange business model (unique, by the way) of “Zadeh Kicks” in which shoppers ordered sneakers months in advance and received store credits if they didn’t arrive, customers who bought before the company’s dissolution are unlikely to recoup their losses.
Everything is now in Justice. A prosecutor’s office accused Malekzadeh of defrauding thousands of clients out of $70 million and forging more than $15 million in loan applications, to which Malekzadeh has pleaded not guilty.
Malekzadeh’s personal tennis collection is going to be auctioned off with the idea of ”testing the market” and seeing how they will auction off the other 60,000.
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