Sneakertown: Portland-Area Retailer Accused of Trafficking Millions of Dollars of Stolen and Counterfeit Shoes

Some prominent analysts have already described 2016 as the "Year of the Scammer." A federal investigation of a Portland-area sneaker retailer suggests they may just be correct.

According to KOIN 6 reporter Brent Weinberg, Happy Valley-based online sneaker retailer get-supplied.com has been shut down after an investigation conducted by the Internal Revenue Service and the Department of Homeland Security discovered the website has potentially been trafficking in millions of dollars in fake, stolen and "gray market" sneakers.

On April 6, federal agents searched the Happy Valley home of get-supplied.com owner James Pepion, discovering and seizing more than 1,600 pairs of potentially counterfeit sneakers from Nike, Adidas and ASICS, alongside 10 cellphones, multiple laptops, and other equipment and documents.

The investigation of get-supplied.com, which is also known as "SuppliedPDX," "Supplied Inc." and "Supplied," began March 5, when Nike's internal investigation team conducted a probe into get-supplied.com and Pepion. Pepion and Supplied are accused of buying, selling and trafficking stolen, counterfeit and unauthorized gray-market promotional pre-release sneakers made from stolen components outside of Nike-approved factories in China.

According to a federal search warrant, Pepion is believed to have used several addresses to obtain around 100 shipments of shoes between May 2009 and January 2015 from Hong Kong and China, receiving more than $2.6 million in his PayPal account since it was opened in 2012.

Agents in Portland searched packages addressed to Pepion and Supplied between March and November 2015, discovering that 16 of their 17 searches contained counterfeit shoes. In August 2015, agents had seized trash and financial information from Pepion's property.

Through a search warrant served to Google, federal agents were able to link Pepion via email to a Chinese national who is suspected of stealing samples and components from Nike manufacturing facilities in China. According to the warrant, Pepion ordered bulk shoes from the national and had them delivered to various people across the U.S. on his behalf. Transfers of $174,460 were made from two American bank accounts to China between June 2013 and September 2015, according to court documents.

Pepion does not yet face any criminal charges, but could face charges of wire fraud, money laundering and trafficking in counterfeit goods.

Many of Pepion's and SuppliedPDX's social media accounts have been deleted. Get-supplied.com is not currently functional, with a message reading that the website is "currently rebuilding."

Nike issued this statement regarding the investigation to KOIN 6: "Nike aggressively protects our brand, our retailers, and most importantly our consumers against counterfeiting. We actively work with law enforcement and customs officials around the world to combat the production and sale of counterfeit product, and are supporting Homeland Security Investigations in this investigation."

Counterfeiting is one of the biggest scourges of the footwear and apparel industry, costing the U.S. market around $12 billion in losses annually for footwear alone. Last year, Portland-based Adidas asked U.S. courts to close close to 300 online retailers for alleged counterfeiting or links to counterfeiters.

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