$80 Million Sneaker Fraud Scandal Lands Zadeh Kicks Founder in Prison

For years, sneaker culture has thrived on hype, scarcity, and trust. That trust took a major hit with the collapse of Zadeh Kicks, an Oregon-based sneaker resale business whose founder is now facing prison time after an $80 million fraud scheme left thousands of buyers empty-handed.

The sneaker resale market has already been under pressure. Prices that once soared into the hundreds or thousands now sit stagnant, while brands like Nike and adidas have pushed back hard against resellers by tightening distribution and selling directly to consumers. Many sneaker businesses downsized or shut down entirely. Zadeh Kicks did not fall because of market conditions. It collapsed under deception.

How Zadeh Kicks Built an Illusion of Success

In 2013, Michael Malekzadeh launched Zadeh Kicks using a familiar blueprint. He bought limited sneakers and resold them online at a markup, a common practice in sneaker culture for over a decade. For years, the operation appeared legitimate.

That changed around 2019, when Zadeh Kicks began taking preorders for sneakers that had not yet been released, often pricing them at or even below retail. At first glance, it seemed like a reseller offering unbeatable access. In reality, prosecutors say it was the beginning of a massive fraud.

By early 2020, Malekzadeh was accepting money for sneakers he did not have and had no realistic way of obtaining. When Zadeh Kicks logged roughly 60,000 preorders for the Air Jordan 11 Retro Jubilee, there was no guarantee those numbers even existed in Nike’s production pipeline.

The situation escalated further with nearly 600,000 preorders for the Air Jordan 11 Retro Cool Grey. Anyone familiar with sneaker releases knows how unrealistic that volume is, especially for a single reseller. Even at peak production, securing hundreds of thousands of pairs of one Air Jordan release would have been nearly impossible.

Where the Money Really Went

Despite growing backlogs and delays, money continued pouring in. According to prosecutors, instead of fulfilling orders or issuing refunds, Malekzadeh allegedly used customer funds to bankroll a luxury lifestyle.

Court records cite purchases that included Bentleys, Ferraris, Lamborghinis, Porsches, expensive watches, jewelry, and hundreds of luxury handbags. While customers waited months and then years for sneakers that never arrived, the company continued operating as if nothing was wrong.

By April 2022, Zadeh Kicks owed customers more than $65 million in undelivered sneakers. The business model had shifted from reselling shoes to cycling incoming preorder money to cover past obligations, a structure that ultimately collapsed under its own weight.

The Damage to Sneaker Culture

The Zadeh Kicks case did more than harm individual buyers. It damaged trust across the entire sneaker resale ecosystem. Independent resellers, boutique shops, and legitimate small businesses felt the fallout as consumers became more cautious, skeptical, and unwilling to prepay for future releases.

At a time when sneaker culture was already facing changes driven by brands reclaiming control, this scandal reinforced why transparency and accountability matter. It also highlighted how hype without oversight can create opportunities for exploitation.

A Cautionary Tale for the Resale Era

The sentencing of Zadeh Kicks’ founder marks one of the largest fraud cases in sneaker culture history. It stands as a warning not just to buyers, but to anyone operating in spaces built on trust and anticipation.

Sneakers have always been more than products. They represent culture, community, and identity. When that connection is abused, the consequences ripple far beyond a single company.

The rise and fall of Zadeh Kicks serves as a reminder that no amount of hype can replace integrity, and that even in culture driven markets, accountability always catches up.