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 sell for $200 but can resell for double that on the marketplace. collectors.
Some write computer codes to snap up limited-edition pairs of Jordans and other coveted Nikes as soon as they go on sale online.
And then there are those suspected of going to great lengths to get exclusive kicks.
Los Angeles police are investigating a thief ring that allegedly stole millions of dollars worth of shoes in an elaborate scheme that stretched from a cavernous Nike warehouse in Memphis, Tennessee, to a posh apartment building in Hollywood.
So far, only one person has been charged in connection with the case, a 37-year-old Tennessee man who police say was operating in Los Angeles, allegedly with the help of a Nike del Este employee. The suspect has not been charged and court records suggest others involved have also avoided arrest and prosecution. The case has rocked the Los Angeles sneaker world, where collectors have questioned whether local retailers had knowledge of the thefts.
Los Angeles authorities announced the seizure of a large cache of stolen Nike equipment at a news conference late last month, but a search warrant affidavit filed by LAPD detectives and reviewed by The Times offers new details about the operations of the theft ring, which remains under control. investigation.
Since June 2023, the ring has been responsible for stealing more than $2 million in Nike products, according to the search warrant, written by LAPD Commercial Crimes Division detective. Marc Sternin, a member of the department’s cargo theft task force. Sternin’s order, made public last month in Los Angeles County Superior Court, said sneaker thefts remain “ongoing and widespread.”
Under the plan, detectives say the suspects exploited loopholes in Nike’s distribution system, starting at the source: a major hub in southeast Memphis, the origin of products shipped nationwide by the apparel giant. sporty. According to detectives, the thieves printed fake shipping labels and paid UPS and Nike employees to “deliberately divert or redirect” shoe boxes to locations throughout Los Angeles.
On Jan. 10, Nike employees in Memphis discovered 10 shoe boxes in the back of a U.S. Postal Service truck, each with an original shipping label that had been covered by a mailing label with the address of the private carrier UPS. The next day, Nike intercepted eight more of these “over-labeled” boxes, which contained shoes “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 online shopping boom sparked by the pandemic. Resellers generated $10.6 billion in sales globally in 2022 alone, according to Market Decipher, a market research company. Competition to buy hard-to-find styles can be fierce. The smartest operators create software robots that can quickly purchase shoes the moment they appear on a retailer’s site. Like the stock market, prices sometimes rise and fall based on real-life events, such as the death of a famous designer or star athlete. Access to exclusive or “pre-release” models, like those found in outbound boxes confiscated by Nike, can be as lucrative as insider trading.
In the theft ring, detectives say, members “intercepted” packages with swapped labels, trapping them somewhere along the supply chain of docks, highways and warehouses. They sometimes hijacked packages by exchanging addresses with shipping companies after they had left Nike’s warehouse, according to Sternin’s affidavit.
Sternin said Nike officials, who had been investigating the thefts internally, contacted Los Angeles police. Several emails seeking comment from Nike were not returned.
A Memphis police sergeant who works with that department’s cargo theft task force told Sternin that he had been working on the case since last June, when he first learned of “numerous unidentified accomplices” who They worked at the Nike location in Memphis.
The network has also recruited UPS employees in Tennessee and California “and possibly other locations within the UPS and Nike supply chain network,” according to Sternin.
When police began investigating, a trail of footprints allegedly led to Roy Lee Harvey of Memphis. Despite coming from the distribution center in Tennessee, the origin address of a shipment of diverted shoes was listed as 6390 De Longpre Ave. in Los Angeles, which Sternin said is the headquarters of RHJ Global Kicks, a company registered in Harvey’s name. in May. 2020.
The same shipment was also addressed to Harvey, in a second-floor unit of an apartment complex at Hollywood Boulevard and Argyle Avenue, the detective wrote.
A check of law enforcement databases determined that Harvey had a “prior association” with another unit on the same floor; Police surmised that he may have used a familiar address or included the unit’s current tenant in his scheme, a common tactic among “cargo thieves,” Sternin wrote.
After obtaining search warrants for Harvey’s email, iCloud data and cell phone records, investigators said they determined that he had exchanged 1,101 calls and text messages over a period of about six months with a phone number associated with a Nike employee in Memphis.
The Nike employee, Sternin wrote, had access to areas where unreleased shoes were stored and was working on the days the mislabeled shipments were discovered.
LAPD Chief Michel Moore told the Police Commission last month that investigators surveilling the Hollywood Boulevard address had seen Harvey pick up dozens of UPS packages there. Moore said that in the past Harvey had been seen delivering boxes to Project Blitz, a popular shoe reseller with a large online following and a high-profile clientele that includes celebrities such as Drake and Beyoncé.
Records show that after his arrest on Jan. 27, Harvey posted bail. Attempts to contact him were unsuccessful and as of Friday morning no defense attorney was listed in the court file. Beyond his arrest, little is publicly known about his background; A Memphis television station recently reported that a background check on him in surrounding Shelby County turned up only a few traffic tickets, which were dismissed.
The Los Angeles County District Attorney’s Office has filed 27 felony charges of receiving stolen property against Harvey.
Moore said 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 in Nike products, so much so that two 53-foot semi-trailers were needed to transport them. Another search warrant was executed in Hollywood. The seized items were said to include “stolen Nike shoes, clothing, accessories and one-of-a-kind prototypes.”
The warehouse belongs to Project Blitz, according to Moore. The company’s owner, Andre Ljustina, is not facing any charges and his name is not mentioned in the LAPD search warrant written by Sternin. He did not respond to emails or phone calls to a number listed in public databases. The company’s website has been down since the raid.
The LAPD case has been scrutinized in the online sneakerhead community, and questions have been raised about how much local sneaker sellers knew, or should have known, about where their merchandise came from. Some commentators have dismissed the case as police overreach. Others noted that most major resellers have relationships with shoe company officials, or outlets, who occasionally offer them first choice for a new release.
In a video posted to YouTube, one commenter compared Project Blitz’s inventory to “a virtual sneaker museum” and linked it to an undated interview in which Ljustina was asked how the company managed to acquire rare shoes that were apparently missing. available elsewhere. “Well, because we are friends and family,” he replied.
Among some local resellers, the sneaker raid was met with surprise and sympathy for the Blitz Project.
Frank Garriola, manager and head buyer at CoolKicks, a streetwear boutique on Los Angeles’ Melrose Avenue, said the case had sparked widespread interest because of Ljustina’s prominence in the sneaker world. While major resellers take steps to ensure they don’t deal in stolen or counterfeit gear, he said, it’s unrealistic to expect them to account for where all the sneakers they buy come from.
“Everyone buys shoes from people like that,” Garriola said, referring to runners who appear to have inside connections with 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 on the “underground sneaker market.”
StockX and other online marketplaces like eBay and Poshmark have vowed to crack down on stolen merchandise listed on their websites. Still, some suspects selling stolen goods have adapted and turned to platforms that don’t present as much risk, such as smaller peer-to-peer apps and exchanges. Others have resorted to the old-school method of selling sneakers from the trunk of their car.
Garriola said it’s not unusual for the most coveted shoes to resell for up to $2,000, depending on how limited it is and the timing. He cited the deaths of fashion designers Virgil Abloh and Chris “Spanto” Printup, which caused sales of shoe styles they influenced to skyrocket on resale websites. The unpredictability of the market, he said, has led to increased pressure to keep up with customer demand.
“It’s like every release is sold out, you can’t get what you want anymore,” Garriola said. “You really have to know what you’re doing to make money.”