On April 18, 2014, federal officials announced the results of an investigation into a black market shoe plot originating in Nike’s headquarters in Beaverton, Oregon. According to the statement, the Nike employees theft scheme involved stealing and selling sample sneakers throughout the U.S. for up to $20,000 per pair.
The Detailed Plot Found in the Report
- Tung Ho, 35, was employed as the company’s Basketball Promo Product Manager, giving him access to Nike sample shoes before they would be released for sale. The position involved developing limited edition sneakers for celebrity figures, including Kobe Bryant and Kevin Durant.
- Ho worked closely with a middleman out of Florida, Jason Keating, also 35. Keating ran a reseller outfit to sell the shoes, making tens of thousands of dollars for the samples.
- Ho was secretly placing orders for pre-production Nike shoes, also termed “Look See” sneakers, directly from the company’s production facility in China.
The tabloid website Smoking Gun published the criminal complaint filed by federal officials, which revealed the details of the Nike employees’ theft scheme. On March 14, authorities raided Ho’s residence, where they discovered and seized almost 2,000 pairs of illicit sneakers and a large stash of U.S currency. Ho was read his Miranda rights, and then confessed to stealing the shoes from his employer and selling them for cash. His channels included both eBay and transactions with another former employee of Nike, Kyle Yamaguchi. The complaint stated that the confiscated shoes were highly sought after in the black market sneaker trade. Many of the pre-productions styles never hit stores, but were sold through the Ho plot in amounts ranging from $1,000 to more than $20,000.
A sworn affidavit was filed along with the felony criminal complaint, which alleged the charges.
- Keating was charged with receiving stolen property from Ho.
- The Nike employees’ theft scheme was so lucrative that it raised red flags at JP Morgan Chase Bank, which processed many transactions between and among the conspirators. The bank opened an internal investigation in late 2012, due to frequent transactions involving large amounts of cash.
- From December 2012 through March 2013, Yamaguchi wrote numerous checks, payable to Ho, in the amount of $104,000, according to JPMorgan bank records.
- Security officials at Nike contacted police about the thefts in February 2014, pointing at Ho and Yamaguchi as conspirators.
- The criminal complaint resulted in the arrest of Keating, but Ho and Yamaguchi have not yet been charged, as the Nike employees theft scheme investigation is not yet complete.
Yamaguchi has proven to be a valuable resource in the investigation, beginning with an interview with federal officials in March. He admitted to acting as broker in the plot, selling the sneakers illegally procured by Ho in exchange for a 20 percent commission. He also mentioned Keating’s involvement and frequent trips to Oregon to make large payments in cash. Yamaguchi aided in obtaining a recorded conversation with Keating after the interview regarding the Nike employees’ theft scheme. Within this recorded conversation the men discussed the fraudulent transactions and the federal raid at Ho’s residence.
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