Update: The Whitaker Group, which manages Social Status, has released a statement addressing the case:
The recent action by the U.S. Attorney’s Office for the Western District of North Carolina (USAO) comes after significant cooperation and good-faith negotiations on our part. To be clear, while we take the allegations in the complaint seriously, they are unfounded, unrelated to our business or this community and unjustified. Our professional inventory management team runs a transparent process built on systems that are both legally compliant and consistent with industry standards. We have also complied with all tax obligations annually.
We have been a staple of the global business community for over 20 years, operating over twenty locations and employing over 250 employees across the country. Our work has been dedicated to helping people of color tell their stories and build a legacy of excellence. That work is now under attack, despite our best efforts at productive engagement with the USAO.
We disagree with the USAO’s allegations concerning our business and remain appreciative of the extraordinary support our vendor partners have shown and continue to show throughout this process. Our success has made us an easy target caught in the middle of a U.S. financial and regulatory war with China of which we have no part in.
We look forward to defending our business and operating model while continuing to proudly serve the communities that have embraced us over the last 20 years. This complaint will not deter us from continuing to tell our stories and build a legacy of excellence and we will continue to vigorously defend our businesses and all that they contribute to culture, commerce and the community.
Original story: Federal agents are investigating a “Charlotte businessman,” who has yet to be named, for an alleged $32 million USD money laundering scheme, according to local news source WSOC-TV. The man in question reportedly owns a franchise of streetwear and sneaker retail businesses, including Social Status.
According to WSOC-TV, IRS investigators told federal agents that the man bought apparel and shoes from an athletic company, the name of which hasn’t been disclosed. He reportedly sold the items to a Chinese national, despite a contract forbidding him from selling the goods outside the US.
IRS investigators said the Chinese buyer then resold the items abroad and are accusing the Charlotte businessman of wrongfully selling at least $32 million USD of goods over a five-year period.
Many brick-and-mortar stores are struggling to move stock, especially as the backstock of older clothing and shoes builds up. The apparent issue in the case lies not only in the man breaking his contract with the athletic company but also in his alleged failure to report cash payments of over $10,000 USD to the IRS, which is defined as money laundering.
The Charlotte businessman hasn’t been charged in connection with the case. This is a developing story, so stay tuned for updates.
In other fashion news, check out the Palace Ultimo 2023 full collection.