The Oregon Department of Revenue has released a list of delinquent taxpayers who owe the state more than $50,000 in unpaid taxes. Among the nearly 2,000 entries is a defunct Eugene-based sneaker company that owes the state over $19 million. But the unpaid taxes are only the tip of the iceberg.
The owner of Zadeh Kicks, Michael Malekzadeh, and its chief financial officer, Bethany Mockerman, were arrested last year and charged with fraud to the tune of $85 million. The two Eugene residents are set to stand trial later this year.
According to the Oregon U.S. Attorney’s Office, the company began as an online sneaker resale company, but around January 2020 started taking orders for unreleased shoes at or near MSRP—regardless of whether it could fill those orders or not, and at prices that were not financially feasible for resale. When he didn’t have the shoes he sold, investigators say Malekzadeh paid some customers back with a combination of cash and Zadeh Kicks gift cards. Other customers got nothing.
By April 2022, the company owed customers more than $70 million in unfilled orders alone, not even counting worthless gift cards. Investigators say it also owed banks $15 million in fraudulent loans, which were obtained using false and altered financial statements.
Malekzadeh and Mockerman will appear in court this September. If the company does pay its taxes, it will be taken off the DOR list.
The only other company on the list that owes more money is American Patriot Brands, Inc., a Nevada-based company that owes the state $27 million in taxes. That company is also under investigation by the Securities and Exchange Commission (SEC) for $30 million in fraud for misrepresenting the size and scope of its Medford cannabis farm to investors.
To see the Department of Revenue's list of delinquent taxpayers, visit this website, then scroll down to the "Tools" section, and click on "Delinquent taxpayer list."
