Sneakers from the Zadeh Kicks Ponzi are Going on Auction to Help Victims
Experts estimate the still-boxed and tagged shoes could be worth between $12 million and $20 million.
Not too long ago, Michael Malekzadeh, the owner of Zadeh Kicks LLC got charged with conspiracy for bank fraud, money laundering, and wire fraud. The owner of the Oregon-based defunct company was accused of stealing up to $85 million from financial institutions and customers in a Ponzi Scheme.
Zadeh Kicks Ponzi Scheme
According to documents by the court, 59780 pairs of sneakers are currently stored in a warehouse and are ready to be auctioned by a receiver appointed by the court. The first 1100 pairs belong to the personal collection of Malekzadeh, which include both used and new kicks.
One of the closely guarded warehouses contains 48,339 Nike, 4626 Adidas, and 4746 Yeezy pairs. Among these, the highly popular and rarer Air Jordans are also likely to be present. The sale also includes styles from Asics, Converse, Reebok, Puma, Vans, and New Balance.
According to the experts, a lot of shoes in the collection of the former Zadeh Kicks owner are still boxed and tagged. Together, these could be worth anywhere around $12 to $20 million. However, that amount is nowhere close to the $70 million that Malekzadeh stole under the guise of Zadeh Kicks, an elaborate Ponzi scheme.
Nevertheless, Bloomberg mentions that the goal here is to sell off as many sneakers from the collection as possible. At least, this could help reimburse thousands of customers who never got their sneakers. Experts have already mentioned that despite raising their best amount, it would not be enough to reimburse all the victims. Furthermore, it might take months for some lucky customers to receive their money, even on the off chance that they do get reimbursed.
Documents say that Malekzadeh, the owner of Zadeh Kicks started his business in 2013 by buying collectible and limited-edition sneakers to resell them online. By January 2020, the company Zadeh Kicks started pre-ordering sneakers even before the public release.
In what now appears to be a Ponzi scheme, Malek Zadeh took money via PayPal and wire transfers upfront before fulfilling an order. He took orders of over 600K pairs of sneakers knowing very well that there is no way he could deliver so many orders.
By April 2022, the Zadeh Kicks owner owed above $70 million to customers. According to documents presented in the court, the Ponzi scheme runner spent the money generated from the pre-orders on luxury items such as Porsche, Mercedes, Ferrari, Bentley, Louis Vuitton, lots of jewelry, furs, and watches worth millions of dollars.
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