Nike Sues Former Employees in Promotional Sneaker Sales Scheme
When Ho was promoted to promo product manager in 2012, he also is believed to have stolen promotional shoes that he ordered from Nike’s China manufacturers, according to court documents. He then allegedly would strike a deal with Yamaguchi, who allegedly sold them to a sneaker collector like Keating.
Keating allegedly purchased various shoes from Yamaguchi that ranged from $5,000 to $30,000 via a wire transfer to Yamaguchi’s bank account, according to court documents. When the price was higher, Keating is believed to have traveled to Portland, Ore., and taken out cash from various bank branches to pay Yamaguchi. Upon receiving the payment, Yamaguchi shipped the sneakers to Keating’s home. Keating is believed to have sold the sneakers to various shoe boutiques across the country. Between November 2012 and July 2013, Keating’s account had $221,320 worth of cash deposits and fund transfers.
Ho received checks from Yamaguchi totaling $104,000 between November 2012 and March 2013, according to court documents. When authorities obtained a search warrant for the home Ho and Yee share, they found 1,941 pairs of shoes and an undisclosed amount of cash. Both Ho and Yee, who worked for Nike since July 2007, were terminated in March due to “circumstances related to this litigation,” Nike said in the lawsuit.
“As long-time employees of Nike, Yamaguchi, Ho and Yee knew they were not authorized to order, take and sell Nike’s promotional products for their own personal gain,” Nike said, according to court documents.
Nike is seeking to recover compensatory and punitive damages, profits from the sales, restitution, and an injunction preventing the defendants from continuing to sell stolen sneakers.
The U.S. Attorney’s Office’s case remains under investigation, and so far there has only been one arrest, according to The Oregonian. Keating was arrested April 16 in Portland, charged with receipt of stolen property. He was released the next day with orders prohibiting him from contacting the other defendants or selling shoes, according to The Oregonian. His arraignment is set for May 15.