Full Breakdown
Michael Malekzadeh Sentenced for $80 Million Fraud Scheme
1/7/2026, 8:19:13 PM
Overview of the Fraud Scheme
Michael Malekzadeh, the former owner of Zadeh Kicks LLC, was sentenced to 70 months in federal prison for orchestrating a fraud scheme that defrauded customers out of more than $65 million and financial institutions out of over $15 million. The sentencing took place on January 6, 2026, in Eugene, Oregon, where U.S. District Judge Michael J. McShane emphasized the severity of the fraud, which affected thousands of victims, including college students and wealthy investors.
Background of Zadeh Kicks
Founded in 2013, Zadeh Kicks specialized in the resale of limited-edition sneakers, attracting sneaker enthusiasts and investors. Malekzadeh transitioned the business model in 2019 to include preorders for unreleased sneakers, allowing him to collect payments upfront. However, by April 2022, he had accumulated over $65 million in undelivered orders, leading to the company's dissolution and a subsequent FBI investigation.
Details of the Fraud
Malekzadeh accepted approximately 600,000 preorders for sneakers he could not fulfill, using the funds to finance a lavish lifestyle that included luxury cars, jewelry, and designer handbags. Prosecutors noted that he received more than $15 million in loans through falsified financial records and bank statements. The total fraud is estimated at around $80 million, with Malekzadeh's actions causing significant financial distress to his victims.
Official Statements & Responses
U.S. Attorney Scott E. Bradford described the fraud as driven by "insatiable greed," which severely impacted the lives of victims, delaying significant life events such as home purchases and retirements. Malekzadeh's attorney, Michelle Kerin, argued for a lesser sentence, highlighting that Malekzadeh self-reported his crimes to the FBI in May 2022 and had no prior criminal history. Judge McShane acknowledged this factor but still imposed a substantial sentence, noting the alarming scale of the fraud.
Criticism & Opposition
Despite Malekzadeh's self-reporting, Assistant U.S. Attorney William McLaren emphasized the extensive harm caused by the fraud, stating that many victims faced severe financial repercussions, including the loss of retirement funds and personal relationships. The judge criticized Malekzadeh for prioritizing luxury over the well-being of his customers, stating, "You could have bailed out public broadcasting in Oregon... instead you did all the flashy cliché stuff that fraudsters do."
Verbatim Quotes
- “This million-dollar fraud was fueled by the defendant's insatiable greed and wreaked havoc on the lives of his victims and their families — delaying home purchases, retirements, and engagements,” — Scott E. Bradford, U.S. Attorney for the District of Oregon
- “The sheer greed in this case led fraud victims to withdraw retirement funds, sell personal possessions, struggle to pay child care costs and lose personal relationships, businesses and equity in their homes, “ McLaren said.” — William McLaren, Assistant U.S. Attorney
- “I’m really sorry to everybody I’ve hurt along this process.” — Michael Malekzadeh
What's Next
Malekzadeh has been ordered to forfeit over $15 million in assets, and a restitution hearing is scheduled for March 31, 2026. His co-defendant, Bethany Mockerman, who participated in the fraudulent activities, is set to be sentenced on January 27, 2026. The fallout from this case continues to unfold as victims seek restitution for their losses.
