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By Matthew Russell Lee, Patreon
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SDNY COURTHOUSE, Sept 10 – Neil Cole, the brand manager charged with financial chicanery was freed on $1 million bond on December 5, 2019 and allowed to travel throughout the United States by agreement of the US Attorney's Office, contrary to the "SDNY and EDNY only" restrictions they routinely place on less affluent defendants.

SDNY Magistrate Judge Barbara Moses accepted the agreed bail conditions, and said that they can be appealed or asked to be modified before SDNY Judge Edgardo Ramos to whom the case is assigned.

On December 29, the US Attorney's Office opposed Cole's subpoena served on Baked by Melissa, where Seth Horowitz, a Government cooperating witness, was the CEO. The US Attorney's Office says the information sought is not relevant, but rather a fishing expedition.

On January 4 Cole's lawyers at Paul Weiss wrote to Judge Ramos, "We understand that Seth Horowitz, now a cooperating witness for the government, also was scheduled to provide SEC testimony in late 2018, but that at or around the same time that Mr. Cole's testimony was rescheduled, Mr. Horowitz's testimony was canceled, likely at the request of the U.S. Attorney's Office, to prevent Mr. Horowitz from testifying and avoid creating a record that could be helpful to Mr. Cole... In July 2020, counsel for Mr. Cole submission a FOIA request to the SEC."

  On March 10, Judge Ramos quashed the subpoena of the Baked by Melissa CEO, as lacking in specificity and casting too wide a net.

But the real fight now in June 2021 is when the trial will be. On June 1, Judge Ramos disclosed that US v. Cole is only the second choice to begin on July 6. So the US asked to suspend the pretrial schedule and its disclosures. The defense says this is unfair. Judge Ramos has set a June 11 hearing. Watch this site.

On January 5 Judge Ramos held a proceeding and Inner City Press live tweeted it here and below.

  Now on June 11, Judge Ramos held another proceeding, and Inner City Press again covered it. The US Attorney's Office asked to postpone the trial from July 6.

Cole's defense lawyer asked to go forward on July 6, but lost that. He then asked for Giglio and 3500 material sooner than the October 4 new trial date set by Judge Ramos.

  Cole won on one of those: he's to get 3500 material by July 15, while Judge Ramos sees if he can do a three week trial in his own courtroom in 40 Foley Square before October 4.

  Now on September 2 the Government has opposed Cole's motion to get the name "of an individuals who provided information that was the subject of a July 3, 3021 disclosure by the Government." The AUSA says Federal Defenders, which represents the individuals, already provided the name. We'll see.

Now on September 10, Cole has filed a motion in limine seeking to exclude evidence of his sale of a million shares of Iconix stock, saying allowing it in would create "unfair prejudice." He cites a Supreme Court decision US v. Socony-Vacuum Oil Co. (it's from 1940), that "appeals to class prejudice are highly improper.

Cole argues, "Evidence of a multi-million dollar financial gain from the sale of stock - particularly in the face of current economic challenges plaguing many in New York and throughout the country - presents a serious danger of undue prejudice." We'll see.

 Inner City Press will stay on the case.

From January 5, 2021: Judge Ramos just said that Chief Judge McMahon has suspended all in-person proceedings now to Feb 16. Now Feb 9 trial is off. [See separate Inner City Press story here]

AUSA: There was a prior investigation of Mr. Cole in the 2000s -- Judge Ramos: When was it? AUSA: We're talking well before 2018. More than a decade before.

AUSA: They have cited no cases, no legal authority, that the SEC can't do that. Perhaps it can't affirmatively mislead. But if the criminal investigation did not exist, they can't mislead. That it might have been in their heads, no due process violation

Judge Ramos, to Cole's lawyer: Is it your position, if the SEC was contemplating a criminal referral, accelerated Mr. Cole's testimony, would it be improper? Cole's lawyer: They told him it was only for internal scheduling purposes. It was misleading. 

Cole's lawyer: It's incredibly fishy. Within a day or two of the request for acceleration, there was a government investigation. There is so much smoke here, we should be allowed to see the communications, or the court should.

AUSA: Iconix is cooperating with the government, even without a formal agreement. They are providing information to the government, what we ask for.  Judge Ramos: Is the company in jeopardy? AUSA: They have a variety of motivations.

Cole's lawyer: Iconix said in its 10-K that it is cooperating. The government should be required to take the bad with the good. We need the electronic data.

 Judge Ramos: So all this will be taken under advisement. In terms of the now delayed trial, what about late Spring? The parties agree, with AUSA citing US v. Petit trial Inner City Press covered. Here, time excluded to April 1. We'll have more on this.

From the announcement by the US Attorney's Office "charging NEIL COLE, the former chief executive officer of Iconix Brand Group, Inc. (“Iconix”), a publicly traded brand management company, with engaging in a scheme to fraudulently inflate Iconix’s revenue and earnings per share and obstruct justice.  The case is assigned to U.S. District Judge Edgardo Ramos.     Mr. Berman also announced today the unsealing of charges against Seth Horowitz, the former chief operating officer of Iconix, who pled guilty on December 2, 2019, and is cooperating with the Government.   

United States Attorney Geoffrey S. Berman said:  “As alleged, Neil Cole entered into illegal secret agreements with joint venture partners to artificially inflate the value to his company.  Further, as alleged, Cole lied to outside auditors and to the SEC, and took steps to destroy evidence.  Now Neil Cole is in custody and facing serious criminal charges for his alleged conduct.  This is the third accounting fraud case brought by our Office in the last four months, which illustrates both the pervasiveness of this crime and my Office’s commitment to policing it.”    

According to the allegations contained in the Indictment unsealed today in Manhattan federal court:  COLE and Horowitz engaged in a scheme to falsely inflate Iconix’s reported revenue and EPS by orchestrating a series of “round trip” transactions in which COLE and Horowitz induced a JV partner, a Hong Kong-based international apparel licensing company (“Company-1”), to pay artificially inflated buy-in purchase prices for JV interests, with the understanding that Iconix would then reimburse Company-1 for the overpayments.

The case is US v. Cole, 19-cr-869 (Ramos).

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