Nike cartons were redirected with unauthorized UPS labels (representative image – Shutterstock)
US federal prosecutors have charged 12 people in an alleged merchandise theft plot that resulted in at least $2 million worth of Nike shoes being diverted from the company’s logistics center in Memphis, Tennessee.According to a report by Freight Waves, the indictment stated that the alleged operation lasted from July 2021 to June 2024 when Nike employees placed unauthorized UPS shipping labels on select cartons, allowing the products to be sent to addresses across the country instead of their intended destinations.Nike’s North American Logistics Center in Memphis receives imported products before distributing them to retailers.
People involved in the scheme first identified shoes they wanted to resell, prosecutors said. Nike employees then located those cardboard boxes inside the warehouse and attached unauthorized UPS labels to them that redirected the shipments to different addresses.A person named Roy Harvey Jr. created UPS labels for select destinations and sent them to Nike employees, who then placed them on the cartons, court records say.
Harvey also allegedly kept some of the shoes and resold the rest. Harvey ran a company called RHJ Global using his parents’ address in Memphis.The indictment says Harvey received 149 UPS labels from shoe seller Cool Kicks between July 2021 and May 2022. He then allegedly created more shipping labels through his RHJ Global account. 1,860 stickers were successfully used between May 2022 and January 2024.Another defendant, Keith Cannon, allegedly created a separate UPS account using information linked to Valid Kixx. According to prosecutors, 459 stickers were used between April 2023 and January 2024, and Canon produced about 800 additional stickers between April and June 2024.The report says that about 3,119 UPS labels were successfully used during the alleged operation. Destinations included California, Wisconsin and Indiana.However, court documents do not accuse UPS of knowingly participating in the alleged conspiracy, describing it only as the carrier that transported the marked cartons.The indictment also alleges that Harvey requested false paperwork after UPS requested supporting documents. Barkat Abraham allegedly created a fake shoe invoice for him in September 2022.
Nike employees helped
According to the indictment, Michael Perkins, who worked as a floor manager at Nike’s logistics center in Memphis, brought unauthorized shipping labels into the warehouse and gave them to Julian Baker, Cortez Spencer, Roderico McClellan and Damon Johnson.
These employees allegedly attached the labels to selected cardboard boxes before leaving the facility.Perkins was interviewed by Nike after Harvey was arrested in January 2024 and later placed on administrative leave. Perkins later left the company but continued to provide stickers to four employees until June 2024.Records also allege that Harvey regularly communicated with Perkins between July 2021 and January 2024, determining which cardboard boxes should be redirected and providing the required shipping labels.
Sellers bought stolen shoes
The indictment also mentions three defendants who own shoe sales companies. Joel DeLuna owned Chicago Emporium in Illinois, Bereket Abraham owned Cool Kicks in the Los Angeles area, while Jorge Cuellar ran Horhead Investments near Los Angeles.According to prosecutors, DeLuna first provided Harvey with shipping labels and later purchased large quantities of shoes from Harvey and Cannon. Chicago Emporium paid Cannon about $492,000 between April and June 2024.Cool Kicks paid Harvey and Cannon $215,275 between April and November 2023 after purchasing large quantities of Nike shoes.Horhead Investments transferred $696,700 to Cannon’s Memphis food truck business, R&Beef Dawgz, between April 2023 and January 2024.Prosecutors alleged that Cadarian Mack sold the shoes through StockX and the GOAT Sneaker Marketplace and received customer payments through PayPal.
1 was arrested and 12 others were tried
According to prosecutors, Harvey was arrested in Los Angeles on January 27, 2024, after receiving a shipment of Nike products.
Part of the indictment says the shipment contained 27 cartons, while another part said it contained 28 cartons.Harvey faces charges of interstate transportation of stolen property and aiding and abetting. The value of the shipment was more than $5,000. If convicted, the maximum penalty for the charge is 10 years in prison, a fine of up to $250,000, and three years of supervised release.All 12 defendants were also charged with conspiracy under federal law. The maximum penalty for this charge is five years in prison, a fine of up to $250,000, and three years of supervised release.Prosecutors are also seeking a forfeiture of at least $2 million.