Former Sneaker Retail CFO Sentenced in Multi-Million Dollar Bank Fraud Scheme

The former chief financial officer of a defunct online sneaker company has been sentenced to 18 months in federal prison for her role in a sophisticated bank fraud conspiracy that deceived financial institutions out of millions of dollars. Bethany Mockerman, who served as CFO of Zadeh Kicks, received the sentence from U.S. District Court Judge Michael McShane in Oregon after pleading guilty to conspiracy to commit bank fraud in March 2025, as The Oregonian reported.

The sentencing concludes a federal investigation into Zadeh Kicks, a high-profile sneaker reselling business that prosecutors say was "built in part on a foundation of bank fraud" and orchestrated a "massive wire fraud victimizing customers" to the tune of more than $65 million in undelimited sneakers.

Background and Context

Founded in 2013, Zadeh Kicks operated within the lucrative niche market for limited edition and collectible sneakers, purchasing rare releases and reselling them online to enthusiasts worldwide. The business model, while legitimate in concept, became the vehicle for an elaborate financial deception scheme that spanned several years before the company's collapse.

According to a January 21 sentencing memo submitted by federal prosecutors, Zadeh Kicks under owner Michael Malekzadeh failed to deliver ordered sneakers to thousands of customers while simultaneously manipulating financial records to secure millions in business loans. The dual fraud scheme ultimately left customers without their purchased products and banks with defaulted loans based on falsified financial statements.

Key Figures and Entities

Bethany Mockerman, as CFO, orchestrated the financial deception that resulted in more than $15 million in fraudulent bank loans obtained through falsified statements. Court records show that while revenue tracking remained accurate, Mockerman systematically misrepresented inventory costs, creditor information, and prepaid customer orders as expenses to create a false picture of the company's financial health.

Michael Malekzadeh, the company's owner who was in a romantic relationship with Mockerman, received a more severe sentence of five years and 10 months in prison after pleading guilty to wire fraud and conspiracy to commit bank fraud. Prosecutors allege that Malekzadeh used proceeds from the fraud to purchase luxury items for Mockerman, including "extravagant gifts such as luxury handbags and watches" around Christmas 2020.

The company itself, Zadeh Kicks, operated as an online retailer with no physical storefronts, leveraging social media marketing and sneaker culture enthusiasm to drive pre-orders and sales that would ultimately go unfulfilled.

Legal and Financial Mechanisms

The fraud scheme employed by Mockerman and Malekzadeh involved multiple sophisticated mechanisms designed to evade detection while maximizing ill-gotten gains. Court documents detail how Mockerman created "a sophisticated, comprehensive scheme to deceive financial institutions into providing unmerited loans" through systematic misrepresentation of company financials.

On the customer fraud side, prosecutors determined that Malekzadeh operated a preorder scheme where customers paid for sneakers that were never sourced or delivered, creating a revolving door of new customer funds being used to support operations rather than actual inventory fulfillment. This practice continued despite growing evidence that the company could not meet its obligations to customers.

For her participation, Mockerman received compensation beyond her salary, including benefits from the purchase and remodeling of a house using company funds. The sentencing memo noted that Mockerman "knew the money came from Zadeh Kicks, knew that money from the company was tainted by bank fraud, but ultimately, 'she wanted a fireplace.'"

International Implications and Policy Response

While the Zadeh Kicks case primarily impacted domestic customers and financial institutions, it highlights ongoing vulnerabilities in e-commerce regulation and the challenges of overseeing online businesses that operate without traditional physical presence verification. The case demonstrates how quickly online retail operations can scale fraudulent activities when physical inventory verification is limited and financial oversight relies primarily on self-reported documentation.

The sentencing comes amid increased scrutiny of online marketplace fraud and calls for enhanced verification requirements for e-commerce businesses seeking financial services. Federal banking regulators have faced criticism for inadequate due diligence processes that allowed the company to secure multiple loans despite fundamental business model flaws that should have triggered greater scrutiny.

Both Mockerman and Malekzadeh were initially charged in July 2022, with Malekzadeh facing additional money laundering charges alongside wire fraud and conspiracy to commit bank fraud charges. Mockerman has agreed to pay at least $15.9 million in restitution as part of her sentencing, though victims' recovery prospects remain uncertain given the scale of the financial losses.

Sources

This report draws on court documents from the U.S. District Court of Oregon, federal prosecution sentencing memoranda, and reporting by The Oregonian. The case documents and proceedings span from July 2022 through April 2025.