PORTLAND (AP) — A former Nike employee who conspired to sell stolen limited-edition sneakers from one of the company’s factories in China will not have to go to prison.
Senior U.S. District Judge Garr M. King sentenced Kyle Yamaguchi to probation and community service.
Yamaguchi received the sentence Wednesday after being extremely cooperative with government investigators, The Oregonian reported.
He presented prosecutors with a binder filled with evidence, including emails and a spreadsheet of illegal transactions. Later, he produced a PowerPoint about the scheme for the very grand jury that indicted him. He also wore a wire into at least one meeting with a co-conspirator.
The judge told Yamaguchi that the crime was serious, but his acceptance of responsibility was extraordinary.
“I wish you well,” King said, “and good luck to you.”
Yamaguchi started working for Nike in 2006. As a promotional product manager at company headquarters in Beaverton, Ore., he ordered sample sneakers from a Nike factory in China.
When Yamaguchi quit in 2012, Tung Wing Ho took the position. Ho and Yamaguchi soon conspired to sneak the promotional shoes off the Nike campus and sell them, according to government prosecutors.
A shoe dealer operating out of Fort Myers, Fla., paid $679,650 for more than 630 pairs of shoes stolen from Nike between September 2012 and March 2014, according to an indictment issued last July in Portland’s U.S. District Court.
Yamaguchi received a percentage of the shoe-sale profits from the dealer, who offered them to other collectors and small retailers across the country, according to prosecutors. Ho and the shoe dealer, Jason Keating, have pleaded not guilty.
“Because the shoes in question were produced in very limited runs and never for sale, they commanded prices from basketball-shoe collectors — so-called ‘sneakerheads’ — that were typically 5 to 15 times the retail prices for comparable Nike shoes,” Assistant U.S. Attorney Ryan Bounds wrote in a sentencing memo.
Nike’s internal security team solved the scheme and forwarded evidence to the Washington County Sheriff’s Office.
Yamaguchi pleaded guilty last December for his role in the conspiracy to transport, receive and sell stolen goods. He faced a potential five-year prison term, but prosecutors recommended a sentence of probation in a plea deal.
Nike officials sought a prison term of more than three years.
“Nike suffered great economic harm due to Mr. Yamaguchi’s and his co-conspirators’ conduct,” Nike Director of Investigations Greg Fowler told the judge. “In addition to the excess manufacturing costs, Nike spent more than $397,000 investigating this criminal scheme.”
One of Yamaguchi’s lawyers, Ron Hoevet, said his client, besides cooperating with investigators, made Nike whole through restitution in a civil settlement. He added that Yamaguchi had launched an eyewear company that gives a pair of prescription glasses to someone in need for every pair that it sells.
