Need advice from experienced EBAYers and Paypalers

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A friend of mine has a connection to import, what I believe are, 'factory varient' Nike sneakers from China. He asked me to help him move them, and we began to set up accounts on EBAY. The shoes are hot, and there is a lot of interest out there for them, and a whopping profit margin. After hooking up a paypal account, and moving some shoes, I get a notice from Paypal requesting inventory information, and the $ in our account is frozen until we provide documents. Furthermore, Paypal will not authorize us to use them to accept $ on current listings until the matter is resolved.

Questions:
1) Is PayPal doing this b/c of pressure from big companies(Nike) to control the underground market?
2) Should we provide the documentation we received from our supplier in China, or just make up some BS about having acquired the shoes at some SWAP meet, and say we don't have the documentation?
3) To what extent do you think Nike monitors EBAY, and pursues those who are doing what we are doing?

Thanks in advance.....