Another chapter in the Zadeh Kicks Ponzi scheme unfolds.
Once a major force in the reselling community, Zadeh Kicks, run by Michael Malekzadeh, filed for receivership back in May of this year once his Ponzi scheme that somehow worked for years fell apart. With this, the entire sneakerverse was up in arms filing for refunds through PayPal, showing up to his warehouse in Oregon, and sounding off online on how deep in the hole some customers were. Fast forward and the FBI had to step in once the damages were accounted for. Some $85 million was owed to customers who had yet to receive the products they pre-ordered, many in bulk, for a discount price compared to the sneaker market. Now, according to Bloomberg, news has come out that the court-appointed receiver is set to sell off Zadeh’s remaining inventory which adds up to just shy of 60,000 pairs.
The Sneakers Comprising Zadeh Kicks Inventory
Court documents reveal that among his entire inventory of 59,780 sneakers he has around 48,000 pairs of Nike shoes and almost 5,000 pairs of Yeezy and regular adidas sneakers alongside the approximately 2,000 pairs between various sneaker brands from Vans to New Balance. The entire set of inventory is estimated to be valued between $12 million and $20 million, so while this may be a smart move to move this inventory to try to recover some of the damages owed to victims, the sneaker market as a whole has seen somewhat of a downward trend in 2022, meaning that many victims will still be left with empty pockets and/or partial refunds.
How Can I Buy Zadeh Kick’s Inventory?
If you’re fortunately one of those that aren’t affected by the Ponzi scheme or happen to run a consignment shop, you might be foaming at the mouth thinking of how many pairs you can buy from the government at discounted prices. To test the waters on how to go about this massive undertaking, David Stapleton will sell off around 1,100 pairs from Zadeh’s personal collection. However, if you’re looking to scoop up pairs as if it were a police auction, you’re likely out of luck as according to Bloomberg, “...preliminary discussions with potential buyers or consumer resale platforms have already begun.”
Once this portion of the sale is completed, the rest of the inventory will either be sold in bulk or flooded across sites like GOAT or StockX, though this is where things can get tricky. Considering there are more than 15,000 victims who are owed compensation, a bulk deal can lead to lower sale prices on average per pair, meaning the true market value may not be attained for these approximately 60,000 pairs. If they choose to go down the resale platform route, that could take months or even years to get rid of the inventory, account for costs, and distribute money to the victims. In the end, it seems like a lose-lose situation.
Will we end up being able to buy a pair of Cool Grey 11s or Yeezy 350s from the government at a discount? Only time will tell as the Zadeh Kicks saga continues to unfold in front of our eyes. To stay updated on this developing story that likely won’t see an end for years to come, keep it locked to our Twitter and download the Sole Retriever mobile app as we’ll keep you posted on the latest developments in Michael Malekzadeh’s case and more throughout the entire sneaker and streetwear world.