The former owner and chief financial officer of Zadeh Kicks made their first appearances in federal court today after being charged with numerous charges that are tied to their online sneaker business that has left customers and banks out of what is estimated to be greater than $100 Million. Both defendants pleaded not guilty to all charges brought against them.
The owner of the now-dissolved Zadeh Kicks business, Michael Malekzadeh, has been charged with wire fraud, conspiracy to commit bank fraud, and money laundering. Bethany Mockerman, former Zadeh Kicks CFO and partner of Malekzadeh, has been charged with conspiring with Malekzadeh to commit bank fraud.
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Malekzadeh is accused by to have advertised, sold, and collected payments from customers for preorders knowing he could not satisfy all orders placed. The initial count of fraud cites an example of Zadeh Kicks selling preorders for 600,000 pairs of Air Jordan 11 Cool Grey sneakers resulting in more than $70 million in sales despite the fact that Malekzadeh had no way of acquiring the quantity of sneakers needed to fulfill the orders. According to the indictment, Zadeh Kicks was only able to acquire just over 6,000 pairs. Customers were left with unfulfilled orders or received Zadeh Kicks gift cards as a form of refund.
In the indictment, Zadeh Kicks’ chief financial officer Bethany Mockerman is alleged to have conspired with Malekzadeh to provide false and altered financial information to numerous banks and financial institutions—including altered bank statements—on more than 15 loan applications. Together, Mockerman and Malekzadeh received more than $15 million in loans from these applications.
As part of the government’s ongoing criminal investigation, federal agents have seized millions of dollars in cash and luxury goods that Malekzadeh acquired with the proceeds of his fraud. The seized items include nearly 100 luxury watches, including some valued at over $400,000, jewelry, and hundreds of luxury handbags. The government also seized nearly $6.4 million in cash which was the result of Malekzadeh’s sale of watches and luxury cars manufactured by Bentley, Ferrari, Lamborghini, Porsche, and others.
Malekzadeh and Mockerman are cooperating with the government’s investigation, including the seizure of assets described above. Both made their first appearances in federal court today before U.S. Magistrate Judge Mustafa T. Kasubhai and were released conditions pending further court proceedings.
If you or someone you know were a Zadeh Kicks customer with unfulfilled orders or otherwise believe you were defrauded by Malekzadeh or Mockerman, the FBI wants to hear from you. Please visit FBI.gov/ZadehKicks to complete a brief online questionnaire. Your voluntary responses will assist with the FBI’s ongoing criminal investigation and help to identify you as a potential crime victim. Based on your responses, you may be contacted by the FBI for more information.
This case is being investigated by IRS–Criminal Investigations, FBI, and Homeland Security Investigations (HSI) with assistance from the Oregon Intellectual Property Task Force. Assistant U.S. Attorneys Gavin W. Bruce and Quinn P. Harrington are prosecuting the case. The related asset seizures and forfeitures are being handled by Assistant U.S. Attorney Katie de Villiers and the U.S. Attorney’s Office’s Asset Recovery and Money Laundering Division.
Defendants are presumed innocent unless and until proven guilty.
