The founder and former chief financial officer of a defunct limited-edition sneaker company, Zadeh Kicks, pleaded guilty to fraud charges linked to millions of dollars in unfulfilled orders. Founded in 2013 by Michael Malekzadeh, Eugene-based Zadeh Kicks bought and sold collectible sneakers. Around 2020, the company started taking preorders for limited-edition sneakers, according to federal prosecutors , but Malekzadeh set prices below market rates knowing he’d get more orders than he could fill.
The company collapsed in 2022 after federal prosecutors said he had accepted more than $65 million for sneakers he never delivered. Instead of buying and delivering Air Jordans and other collectible sneakers, prosecutors said Malekzadeh spent the money on luxury goods, including cars made by Bentley, Ferrari, Lamborghini and Porsche, as well as watches, jewelry and handbags. Prosecutors alleged Bethany Mockerman, the former chief financial officer of Zadeh Kicks, worked with Malekzadeh to file 15 false applications for bank loans, netting them another $15 million.
In 2022, Malekzadeh was charged with wire fraud, conspiracy to commit bank fraud, and money laundering. Mockerman was charged with conspiracy to commit bank fraud. On Thursday, both pleaded guilty to conspiring to commit bank fraud.
Malekzadeh also pleaded guilty to wire fraud. Malekzadeh faces up to 20 years in prison, a $250,000 fine and three years of supervised release for wire fraud, and 30 years in prison, a $1 mill.