James Whitner Has A Day - by Lois Sakany
The sneaker world was rocked today by news that 44-year-old CEO James Whitner of The Whitaker Group, an umbrella company that houses A Ma Maniére, Social Status, APB, and Prosper, was named in a multi-million-dollar money laundering complaint. Whitner has not been charged and within 24 hours of the news breaking, he issued a statement declaring his innocence. The news was first reported by Charlotte, North Carolina-based WOSC TV by reporter Jason Stoogenke.
Putting it simply, Whitner between November 2017 and April 2022 allegedly sold approximately 32M dollars’ worth of Nike (described as an Oregon-based manufacturer) shoes and clothing to a Chinese person (named YG in the complaint), who resold the shoes in China and other locations. A broker would then direct a crew of miscreants (described as money couriers) in the United States to collect cash from illegal activity including prostitution and illegal drug sales.
The other name that popped up in the complaint is Whitner friend and mentor Antwain Freeman, who was arrested and charged with misprision of a felony (which consists of failing to report knowledge of a felony to the appropriate authorities). Freeman is is one of four founders of The Foundation, a showroom that distributes brands including Billionaire Boys Club and Kappa. Freeman and Whitner have known each other since the mid-2000s when Whitner opened his first Social Status location Pittsburgh.
Freeman played the role of the middle man who received payments from the money couriers that he then delivered to Whitner. Appropriately enough given his role as a bag man, he was walking over to his Midtown Manhattan office carrying a backpack containing a deposit bag when he was placed in cuffs by the feds on what was no doubt a hot day on August 17, 2021.
When the law raided his home in North Bergen, NJ, they discovered $1.2M in cash in his closet, stored in USPS boxes. According to the complaint, “The currency was hidden in Freeman’s closet…about which Whitner was aware but The Whitaker Groups in-house accountant was unaware.”
About a year later, Freeman conveyed to Whitaker that he had been arrested, and that law enforcement had told him that some of the money they had received was proceeds of drug trafficking activity. According to the complaint, “Whitner proceeded to explain that any potential criminal source linked to the [U.S. currency] didn’t have anything to do with his business selling shoes. Whitner further exclaimed that the money couriers ‘could be into Lord knows what[,]’ but that his business was ‘exchanging shoes for money’ and the business needed its revenue.”
Whitaker needing his revenue brings us back to the whole point of the case, which is that he wants his money back, while the feds are arguing the stacks of cash now belong to them because the money was “involved in a transaction or attempted transaction in violation of 18 U.S.C. § 1960 (prohibition of unlicensed money transmitting businesses) or any property traceable to such property.”
Now we wait to hear what Nike has to say and whether The Whitaker Group will be punished at the least for backdooring shoes. Other retailers have lost their Nike accounts for much less. Nike is a public company viewed as a bluechip stock and it’s hard to believe the many lawyers it employs are not super freaked out by this.
The problem is that Whitner is very emeshed in Nike’s business and for years has received extra special treatment when it comes to much higher allocations of premium product compared with his peers in the boutique channel (part of why none of his competitors are shedding any tears). As I mentioned a couple weeks back, he has an ultra tight partnership with Jordan, which has translated to multiple exclusive shoe and apparel collaborations, most of which sell for a premium in resale.
The other question is whether Nike will continue to give its blessings to Whitaker Group’s as of yet unannounced plan to open a New York store. Whatever Nike decides, it’s yet another bummer moment with a meaningful collaborative partner. In addition to the death of Virgil Abloh in 2021, Nike has had to navigate through the fall out from Travis Scott’s Astroworld Festival where eight people were killed and also cut ties with artist Tom Sachs following reporting by Curbed describing his studio as a hostile work environment.
The blow up with Whitner is an especially painful pill to swallow because as a bright and ambitious Black entrepreneur who turned his life around, he was a symbol of progress, the beginning steps of righting the wrong of a lack of ownership within a space that has consistently under rewarded and exploited the outsized contributions of Black people to sneaker culture.
Check out the first three pages of the complaint below. If you’d like to see the entire document, email me.
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