Fake labels, exclusive shoes and hijacked packages: How the LAPD cracked a ‘sophisticated’ Nike theft ring

Most die-hard sneakerheads wouldn’t think twice about waiting hours in line to be the first to score the Air Jordan 4 BRED Reimagineds — which retail for $200, but can resell for double that on the collectors market.

Some write computer code to snap up pairs of limited edition Jordans and other coveted Nikes as soon as they go on sale online.

And then there are those suspected of going to even greater lengths to get exclusive kicks.

Los Angeles police are investigating a theft ring that allegedly swiped millions of dollars worth of shoes in an elaborate scheme that stretched from a cavernous Nike warehouse in Memphis, Tenn., to a swanky Hollywood apartment building.

So far, only one person has been charged in connection with the case, a 37-year-old Tennessee man who police say operated around L.A. — allegedly with the help of a Nike employee from back East. The suspected insider has not been charged, and court records suggest others involved have also avoided arrest and prosecution. The case has roiled the L.A. sneaker world, where collectors have been left wondering whether local retailers had knowledge of the thefts.

Los Angeles authorities announced the seizure of a large cache of stolen Nike gear at a news conference late last month, but a search warrant affidavit filed by LAPD detectives and reviewed by The Times offers new details into the operations of the theft ring, which remains under investigation.

Since June 2023, the ring has been responsible for swiping more than $2 million in Nike products, according to the search warrant, written by LAPD Commercial Crimes Division Det. Marc Sternin, detailed to the department’s cargo theft task force. Sternin’s warrant, made public last month in Los Angeles County Superior Court, said the sneaker heists remain “ongoing and pervasive.”

Under the scheme, detectives say the suspects exploited loopholes in Nike’s distribution system, starting at the source: a main hub in southeast Memphis, the origin of products shipped nationwide by the sportswear giant. The thieves printed fake shipping labels and paid off employees at UPS and Nike to “deliberately misdirect or redirect” cartons of shoes to locations across L.A., according to detectives.

On Jan. 10, Nike employees in Memphis discovered 10 cartons of shoes in the back of a U.S. Postal Service truck — each with an original shipping label that had been covered by a pre-addressed mailing label for the private carrier UPS. The next day, Nike intercepted another eight of these “over-labeled” cartons, which contained shoes “unavailable for sale or resale within their worldwide supply chain,” Sternin wrote.

The sneaker economy has exploded in recent years, taking off amid the pandemic’s online shopping boom. Resellers generated $10.6 billion worth of sales globally in 2022 alone, according to Market Decipher, a market-research firm. Competition for buying hard-to-find styles can be fierce. Savvier operators create software bots that can quickly buy up shoes the moment they show up 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 celebrity designer or star athlete. Access to exclusive or “pre-released” models such as those in the outgoing cartons seized by Nike can be as lucrative as insider trading.

In the theft ring, detectives say, members would “intercept” packages with swapped labels, snatching them up somewhere along the supply chain of docks, highways and warehouses. Sometimes they would hijack packages by swapping addresses with the shipping companies after they had left Nike’s warehouse, according to Sternin’s affidavit.

Sternin said officials from Nike, which had been investigating the thefts internally, contacted the LAPD. Several emails seeking comment from Nike went unreturned.

A Memphis police sergeant working with that department’s cargo theft task force told Sternin that he had been working the case since last June, when he first became aware of “numerous unidentified co-conspirators” working at Nike’s Memphis location.

The ring has also recruited UPS employees in Tennessee and California “and possibly elsewhere within UPS and Nike supply chain network,” according to Sternin.

When police began investigating, a trail of footprints allegedly led back to Roy Lee Harvey of Memphis. Despite coming from the distribution center in Tennessee, the address of origin on one shipment of diverted shoes was listed as 6390 De Longpre Ave. in Los Angeles, which according to Sternin is the headquarters of RHJ Global Kicks, a company registered to Harvey in May 2020.

The same shipment was also addressed to Harvey — at a second-story unit in an apartment complex at Hollywood Boulevard and Argyle Avenue, the detective wrote.

A check of law enforcement databases determined that Harvey had a “previous association” with another unit on the same floor; police surmised that he may have used a familiar address or had the listed unit’s current tenant in on 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 he had exchanged 1,101 calls and text messages over a roughly six-month period 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 who was working on the days the mislabeled shipments were discovered.

LAPD Chief Michel Moore told the Police Commission last month that investigators performing surveillance on the Hollywood Boulevard address had seen Harvey pick up dozens of UPS packages there. Moore said that Harvey had in the past 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 bond. Attempts to reach him were unsuccessful, and no defense attorney was listed on the court docket as of Friday morning. Beyond his arrest, little about his background is publicly known; a Memphis TV station reported recently that a review of his criminal record in surrounding Shelby County only turned up a few traffic tickets, which were dismissed.

The Los Angeles County district attorney’s office has filed 27 felony counts of receiving stolen property against Harvey.

Moore said some of the stolen shoes were recovered during a raid of a warehouse in Hawthorne, also on Jan. 27, where police found around $5 million worth of Nike products — so much that it took two 53-foot semi trailers to haul away. A separate search warrant was executed in Hollywood. The seized items were said to include “stolen Nike shoes, clothing, accessories and unique prototypes.”

The warehouse belongs to Project Blitz, according to Moore. Company owner Andre Ljustina does not face any charges, and his name is not mentioned in the LAPD search warrant authored by Sternin. He did not respond to emails or phone calls for a number listed for him in public databases. The company’s website has been down since the raid.

The LAPD case has been parsed in the online sneakerhead community, with questions raised about how much local sneaker dealers knew or should have known — about where their merchandise was coming from. Some commenters have dismissed the case as police overreach. Others pointed out that most major resellers have relationships with shoe company officials, or plugs, who occasionally offer them first dibs on a new release.

In one video posted on YouTube, a commentator compared Project Blitz’s inventory to “a virtual sneaker museum” and linked to an undated interview in which Ljustina was asked how the company managed to procure rare shoes that were seemingly unavailable elsewhere. “Well, because we’re friends and family,” he responded.

Among some local resellers, the sneaker bust was met with surprise and sympathy for Project Blitz.

Frank Garriola, a manager and head buyer at CoolKicks, a streetwear boutique on Los Angeles’ Melrose Avenue, said the case had drawn strong interest because of Ljustina’s prominence in the sneaker world. While major resellers take steps to ensure they’re not dealing in stolen or fake gear, he said, it is unrealistic to expect them to account for where all of the sneakers they buy come from.

“Everybody buys sneakers from people like that,” Garriola said referring to brokers 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 affadavit, a pair of unreleased Nike shoes can fetch as much as six times their original value on the “clandestine sneaker market.”

StockX and other online marketplaces such as eBay and Poshmark have promised to crack down on stolen merchandise that is listed on their websites. Even still, some suspects peddling stolen goods have adjusted, turning to platforms that don’t have as much risk, such as smaller peer-to-peer apps and exchanges. Others have turned to the old school method of selling sneakers from the trunk of their car.

Garriola said it isn’t unheard of 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 prompted sales of shoe models 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 just like every release is sold out, you can’t really get what you want anymore,” Garriola said. “You really got to know what you’re doing in order to make money.”