Michael Malekzadeh, the infamous retailer who shut down his Oregon-based sneaker business this year and left millions of dollars in pending orders with customers, has been charged with wire fraud, conspiracy to commit fraud banking and money laundering.

A case filed Friday in Oregon District Court accuses Malekzadeh of raking in millions of dollars on sneaker pre-orders he couldn’t fulfill, then spending the money on high-end cars. high-end, designer bags and “millions of dollars in watches”. His partner Bethany Mockerman, the resale company’s chief financial officer, is also charged.

Malekzadeh, better known online as Zadeh Kicks, is accused of defrauding customers by selling pre-orders of coveted shoes which he was unable to fulfill. “Malekzadeh had no opportunity to purchase the sneakers for less than he had pre-sold them,” Friday’s filing said. “Instead, he purchased sneakers from other third-party vendors at or above retail price.”

Zadeh Kicks’ story went viral when news of his disbanding from his business came in May. Since then, hundreds of customers have emerged with horror stories about how much money they spent on pre-orders that were never fulfilled. A Zadeh Kicks buyer told Complex that he tied up $500,000 in pending orders.

A court document detailing the criminal charges against Malekzadeh describes how he would offer to “buy out” customer orders he couldn’t fulfill, covering the differences with cash and gift cards. Malekzadeh reportedly accepted pre-orders for over 600,000 pairs of the Air Jordan 11 “Cool Grey” in 2021, earning his company $70 million. He only acquired just over 6,000 pairs of shoes, according to the record.

The description of the wire fraud charge against Malekzadeh states that on January 10, 2022, he attempted to transfer $2.4 million from a PayPal account to Zadeh Kicks LLC’s bank account.

“Mr. Malekzadeh makes no secret of his conduct,” his lawyers said in a statement to Complex. “He has always taken full responsibility for his actions and will continue to do so. It has cooperated fully with the Federal Government and the Receiver from day one, as its primary objective is to minimize financial harm to its customers and other interested parties. »

In their statement, his lawyers pointed out that Malekzadeh turned over his company’s assets to receivership and turned over millions of dollars in personal assets to the federal government.

“He did so knowing that these assets would serve to ensure that the parties who suffered financial harm were as whole as possible in a fair and equitable manner and to protect those parties from any single creditor ‘jumping the line’ for receive an unfair share,” the attorneys said. “Mr. Malekzadeh will continue to work with the government to provide his remaining personal assets for the same purpose.”

Prosecutors allege that Malekzadeh and his partner Mockerman provided false information, including altered bank statements, when applying for a loan for Zadeh Kicks. “In total, the defendants submitted more than 15 fraudulent loan applications, all of which contained false and altered financial information,” the court document states. “Defendants have received well over $15 million in loan funds through these applications.”

In the money laundering charge, prosecutors allege Malekzadeh transferred $790,000 from his business bank account to his personal account on June 7, 2021, to purchase a $420,000 watch and a $79,000 car.

If found guilty, the two defendants will be forced to confiscate any property related to their alleged crimes.

Malekzadeh is also the subject of a civil lawsuit filed by American Express last week seeking damages in excess of $2 million. In this lawsuit, he is charged with fraud and breach of contract with the credit card company.