Most sneakerheads wouldn't think twice about waiting hours in line to be the first to get their hands on the Air Jordan 4 BRED Reimagineds — which retail for $200, but can resell for twice that on the collector's market.
Some write computer code to snap up pairs of limited-edition Jordans and other coveted Nike shoes as soon as they go on sale online.
Then there are those who are suspected of going to greater lengths to obtain exclusive kicks.
Los Angeles police are investigating a theft ring that allegedly stole millions of dollars worth of shoes in an elaborate scheme that stretched from Nike's cavernous warehouse in Memphis, Tennessee, to a luxury apartment building in Hollywood.
So far, only one person has been charged in connection with the case, a 37-year-old man from Tennessee who police say was working around Los Angeles — with the help of a Nike employee from the Middle East. The suspected insider was not charged, and court records indicate that others involved also avoided arrest and prosecution. The case has alarmed the Los Angeles sneaker world, leaving collectors wondering whether local retailers were aware of the thefts.
Los Angeles authorities announced the seizure of a large amount of stolen Nike gear at a press conference late last month, but a search warrant filed by LAPD investigators and reviewed by The Times provides new details about the theft ring's operations, which remains under control. investigation.
Since June 2023, the network has been responsible for the theft of more than $2 million in Nike products, according to a search warrant written by the Los Angeles Police Department's Commercial Crimes Division. Mark Sternin, was sent to the department's merchandise theft task force. Sternin's memo, which was announced last month in Los Angeles County Superior Court, said sneaker theft remains “ongoing and widespread.”
Under the scheme, investigators say the suspects exploited vulnerabilities in Nike's distribution system, starting at the source: the main hub in Southeast Memphis, the source of products shipped nationwide by the sportswear giant. The thieves printed fake shipping labels and paid employees at UPS and Nike to “misdirect or intentionally redirect” shoe boxes to locations throughout Los Angeles, according to investigators.
On January 10, Nike employees in Memphis discovered 10 boxes of shoes in the back of a U.S. Postal Service truck — each bearing an original shipping label that had been covered by a pre-addressed mailing label from the private carrier UPS. The next day, Nike intercepted another eight of these “over-glued” cardboard boxes, which contained shoes “that are not available for sale or resale within its global supply chain,” Sternin wrote.
The sneaker economy has exploded in recent years, taking off amid the pandemic-driven online shopping boom. Sellers generated $10.6 billion in sales globally in 2022 alone, according to Market Decipher, a market research firm. Competition to purchase hard-to-find styles can be fierce. Smarter operators are creating software bots that can quickly purchase shoes as soon as they appear on a retailer's website. As in the stock market, prices sometimes rise and fall based on real-life events — such as the death of a famous designer or sports star. Gaining access to exclusive or “pre-released” models such as those found in released cartons captured by Nike can be as lucrative as insider trading.
In a theft ring, investigators say, members “intercept” packages with swapped labels, pilfering them somewhere along the supply chain from docks, highways and warehouses. Sometimes, they would hijack packages by exchanging addresses with shippers after they left the Nike warehouse, according to Sternin's affidavit.
Sternin said officials from Nike, which was investigating the thefts internally, contacted Los Angeles police. Multiple emails seeking comment from Nike were not returned.
A Memphis police sergeant who works with that department's Merchandise Theft Task Force told Sternin he had been working the case since last June, when he first learned of “several unidentified conspirators” working at the Nike location in Memphis.
The network has also recruited employees at UPS in Tennessee and California “and possibly elsewhere within the UPS and Nike supply chain network,” according to Sternin.
When police began investigating, a series of footprints allegedly led to Roy Lee Harvey of Memphis. Although coming from a distribution center in Tennessee, the originating address for one shipment of converted shoes was listed as 6390 De Longpre Ave. in Los Angeles, which according to Sternin is the headquarters of RHJ Global Kicks, a company Harvey registered in May. 2020.
The same shipment was also addressed to Harvey, in a second-floor unit in an apartment complex at Hollywood Boulevard and Argyle Street, the detective wrote.
A check of law enforcement databases found that Harvey had a “previous association” with another unit on the same floor; Police speculated that he may have used a familiar address or made the current tenant of the unit listed in his scheme — a common tactic among “cargo thieves,” Sternin wrote.
After obtaining search warrants for Harvey's email, iCloud data and cellphone records, investigators said they determined that he exchanged 1,101 calls and text messages over a period of approximately six months with a phone number associated with a Nike employee in Memphis.
Sternin wrote that a Nike employee had access to areas where unreleased shoes were stored and who was working on the days the mislabeled shipments were discovered.
Los Angeles Police Chief Michel Moore told the Police Commission last month that investigators conducting surveillance at the Hollywood Boulevard address saw Harvey picking up dozens of UPS packages there. Moore said Harvey has been seen in the past delivering boxes to Project Blitz, a popular shoe seller with a large online following and high-profile clients that include celebrities like Drake and Beyoncé.
After his arrest on Jan. 27, Harvey posted bond, records show. Attempts to reach him were unsuccessful, and no defense attorney was listed on the court's roster as of Friday morning. Aside from his arrest, little is known about his background; A Memphis TV station recently reported that a review of his criminal record in surrounding Shelby County turned up only a handful of traffic violations, which were dismissed.
The Los Angeles County District Attorney's Office filed 27 felony counts of receiving stolen property against Harvey.
Some of the stolen shoes were recovered during a raid at a warehouse in Hawthorne, also on Jan. 27, where police found about $5 million worth of Nike products — so much so that it took two 53-foot semi-trailers to tow them, Moore said. A separate search warrant was executed in Hollywood. The items seized were said to include “stolen Nike shoes, clothing, accessories and prototypes.”
The warehouse belongs to the Blitz project, according to Moore. Company owner Andrei Lyustyna faces no charges, and was not named in the LAPD search warrant written by Sternin. He did not respond to emails or phone calls to a number listed for him in public databases. The company's website has been down since the raid.
The LAPD case has been analyzed in the online sneaker community, with questions raised about how much local sneaker dealers know – or should know – about the source of their merchandise. Some commentators dismissed the case as police overreach. Others pointed out that most major sellers have relationships with shoe company officials, or plugs, to whom they sometimes make their first offers on a new release.
In one video posted on YouTube, a commenter compared Project Blitz's inventory to a “virtual sneaker museum” and linked to an undated interview in which Justina was asked how the company was able to purchase rare shoes that were apparently not available anywhere else. “Well, because we're friends and family,” he replied.
Among some local distributors, the discovery of the sneaker was met with surprise and sympathy for Project Blitz.
Frank Gariola, director and chief purchasing officer at CoolKicks, a streetwear store on Melrose Avenue in Los Angeles, said the case attracted strong interest because of Justina's reputation in the sneaker world. While major distributors take steps to ensure they're not dealing with stolen or counterfeit gear, it's unrealistic to expect them to consider the provenance of all the sneakers they buy, he said.
“Everyone buys sneakers from people like this,” Gariola said, referring to middlemen who appear to have inside connections to shoe companies. “And we don't know if it's stolen when we get it here.”
Based on his experience, Sternin wrote in his affidavit, a pair of unreleased Nike shoes can fetch up to six times their original value in the “underground sneaker market.”
StockX and other online marketplaces like eBay and Poshmark have promised to crack down on stolen goods listed on their websites. However, some suspects selling stolen goods have adapted and turned to platforms that do not carry as much risk, such as apps and smaller peer-to-peer exchanges. Others have resorted to the old-school method of selling sneakers out of the trunk of their car.
It's not unheard of for coveted shoes to be resold for up to $2,000, depending on how limited they are and the timing, Gariola said. He cited the deaths of fashion designers Virgil Abloh and Chris “Spanto” PrintUp, which led to a spike in sales of shoe models they influenced on resale sites. The unpredictability of the market has led to increased pressure to keep up with customer demand, he said.
“It's like every release is sold out, and you can't really get what you want anymore,” Gariola said. “You really have to know what you're doing in order to make money.”
