A “rug pull” is a ruse in the cryptocurrency world whereby developers abscond with investor money, running off with untold millions of dollars. If that ploy rings a bell to those in the sneaker community, it may be because one notorious reseller seemingly did just that last month when Oregon’s Michael Malekzadeh dissolved his LLC, Zadeh Kicks, scrubbed his social media, and left customers on the hook for millions.
The complicated case is still developing behind the scenes. Malekzadeh’s assets have been turned over to a receiver who is in charge of seeing out the dissolution of the LLC. The FBI is involved and the situation has been formally dubbed a criminal investigation, but not much else is on record with regard to any charges brought forth against Malekzadeh at this time. The former power reseller has gone completely quiet save for a quote from his lawyer, David Angeli.
“Out of respect for the FBI’s ongoing investigation, it would not be appropriate for Michael Malekzadeh to comment at this time on the specifics of what is a very complicated situation,” Angeli said in a statement. “However, he is 100 percent committed to doing everything he can to minimize the fallout on anyone who may have been negatively impacted.”
As the criminal investigation proceeds and what is likely going to be a lengthy resolution process continues, we sought out a former Zadeh Kicks customer who took an especially significant hit to the tune of $500,000. The interview, conducted anonymously by email and phone and lightly edited for clarity, sheds light on just how deep some of the buyers were in. While Complex cannot publicly reveal the identity of the interviewee, data and receipts were reviewed to ensure the legitimacy of the information presented below.
Would you say you primarily consider yourself a reseller?
I’d consider myself a reseller; however, I truly respect the sneaker culture. I have been into buying/collecting sneakers since I was in middle school (2005). I remember the midnight releases, the easy campouts, and going during lunch period casually into a VIM or Jimmy Jazz and finding the release drop in my size or near my size. I sold off my personal sneakers back in 2011 and didn’t get into actually reselling them until 2013 when I couldn’t find “Royal” Air Jordan 1s anywhere and had to pay up for them. In addition, I’m willing to help others secure their pairs over reselling when possible (ex.: size swapping, or sometimes an alley-oop on a pair).
How long were you buying from Zadeh?
Since the beginning of 2017. I first found out about Zadeh Kicks in 2016 when a friend of mine purchased about 40 to 50 pairs of Air Jordan 9s. I was very skeptical about his whole deal, but then he delivered on all pairs at below the suggested retail price, and that’s when my skepticism started fading away. I didn’t order until 2017. I had to get my purchase power correct, since upfront funds were needed to preorder sneakers.
How much money do you have tied up in this?
I’m currently in the six-figure range. About half a million tied up in this situation.
What are your biggest outstanding orders?
The biggest outstanding orders are for three shoes: Air Jordan 11 Cool Grey (1,500 pairs), Air Jordan 5 Racer Blue (1,500 pairs), and Air Jordan 6 Midnight Navy (500 pairs). There are a few small ones as well, but those are the biggest ones.
What sort of order delays (if any) did you experience?
I haven’t experienced any delays up until this year.
What made you want to keep ordering despite having large orders still unfulfilled?
All orders were made roughly during the same time period. Zadeh worked via prolonged preorders. He would fulfill orders usually within two months of their release date. I haven’t placed an order since fall 2021 (for 2022 releases). Cool Grey Jordan 11s came out in 2021, but usually holiday shoe releases would get fulfilled in February of the next year. I didn’t keep ordering. I was waiting until the 2022 orders were fulfilled before even thinking of ordering more shoes.
Did you ever have an issue with any of the pairs you received? Fake, defects, etc.?
Aside from a few shoeboxes having dings due to shipment, I never had any issues at all. All shoes received were 100 percent authentic and real. They all passed verifications from all online selling platforms like GOAT, StockX, and eBay, and all major sneaker consignment shops like Stadium Goods and Flight Club.
Did you ever feel things were “too good to be true,” or did you have a hunch something was up?
In 2017, I felt as if things were too good to be true. Prices were very fair, especially for general release shoes bought in bulk, but Zadeh always kept coming through with the promised time frame (one to three months max from release date) and delivering on all orders in full. If something went wrong, such as a wrong size or wrong pair, he would refund you.
Zadeh always came through, including on rare releases such as Travis Scott x Jordan 1s, Union x Jordan 1s, Dior x Jordan 1s, Off-White x Nikes, and even Dunks such as the “Chunky Dunky.” I always stood away from highly coveted releases, but I do know from others that Zadeh delivered in bulk for these highly sought after drops. I only felt as if something was up toward March 2022 when he didn’t deliver for 2021 Cool Grey 11s, but I gave him the benefit of the doubt due to the state of things overall such as COVID delays and supply chains in general experiencing disruptions nowadays.
What have PayPal/credit card companies told you thus far? Any luck getting money back yet?
PayPal was not much help, to be honest. It was the first that I called for help. It said it couldn’t help me dispute any of the charges (despite purchasing through PayPal because Zadeh’s website payment only worked via PayPal), because I was out of the strict 180-day period [when users are able to dispute a charge]. So why did PayPal let Zadeh collect funds using PayPal as the only payment method and become a top Shopify site when he runs a business solely on prolonged preorders that force you to be out of the 180-day period to then not cover or help out your customers?
Citibank has been tough to work with. There has been no update or a way to check the status of the disputes through Citi. Its customer service was also very poor. However, American Express customer service has been very, very helpful. It has been trying its best to cooperate and help open up as many disputes as possible for any outstanding unfulfilled orders I have with Zadeh.
A representative over the phone even acknowledged that they’ve been receiving many calls in regard to this merchant (Zadeh) and are somewhat aware of the situation. They also have been sending email updates and have a user-friendly online portal that lets you track your case for any updates. Thank God I paid for some orders using American Express. Thus far, no luck in getting any money back yet, aside from Amex providing temporary provisional credit on a few disputes.
What are your thoughts on sneaker reselling after all of this? Do you think you’ll still be participating?
Sneaker reselling and reselling in general will always be around. I wish everyone had a fair chance to get everything they truly want but there will always be limited runs of sneakers releasing. Celebs/influencers/connected people (friends and family) will always have first dibs and that won’t ever change. However, people need to learn how not to fall into a pattern of always wanting everything and start accepting their “L”. There’ll always be sneakers dropping.