“This is a Bernie Madoff-size scam for the sneaker market”

There are so many telltale signs of the corroding effects of capitalism on society that I’d hardly know where to start (or end) in presenting the evidence.

But this Wall Street Journal article about the reseller market in high-end sneakers is right up there.

Mr. Malekzadeh’s apparent success afforded him the kind of insouciant, gold-plated lifestyle that luxury sneakers are thought to reflect. On Instagram, the 39-year-old showed off his Ferraris and a six-figure Girard-Perregaux watch next to a hamburger. He also posted shots of himself riding a $29,000 Louis Vuitton bicycle inside his million-dollar home in Eugene, Ore.

The business, in real life, was collapsing under the weight of unfulfilled orders, late payments and customer complaints. In May, Mr. Malekzadeh’s fiancée—also the company’s finance chief—pushed for both of them to come clean, according to people familiar with the situation.

Federal prosecutors a few months later charged the couple with bank fraud and Mr. Malekzadeh with wire fraud and money laundering. Customers claim they paid millions of dollars for shoes that never arrived. A court-appointed receiver is sorting out the remaining inventory of the entrepreneur’s company, Zadeh Kicks.

Early last year, Mr. Malekzadeh collected orders for about 600,000 pairs of Air Jordan 11 Cool Grey sneakers months before they hit stores, netting over $70 million, according to prosecutors. He priced the sneakers between $115 and $200 a pair, cheaper than their expected retail price of around $225, prosecutors said.

Mr. Malekzadeh was able to get only 6,000 pairs.

Prosecutors allege he collected preorder funds from customers while knowing he couldn’t fill all the orders. Since at least 2020, he spent more than $10 million of the company’s preorder proceeds on luxury goods, including watches, furs and handbags, they said. In a seizure warrant affidavit, federal authorities allege the couple also used customer money to help make a down payment on a house and complete about $600,000 of work to remodel it.

Seriously, man, Yeezy and Travis Scott are both terrible human beings. The evidence has been out there for some time that they are not the kind of people you’d want in your social circle unless you are a hopeless social climber.

Yet someone people still pay thousands for sneakers with their names on them.

Of course a business like that would be ripe for con artists. I don’t feel a bit of sympathy for anyone who gets swindled in this maelstrom of greed and status-seeking. You’re stupid enough to pay more than $100 for a pair of sneakers, you deserve to get cheated.

Malekzadeh in his empire that was apparently largely smoke and mirrors.

Leave a Reply