SDNY COURTHOUSE,
Nov 3 – 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
was assigned.
On October 6,
2021, the first jury trial
began and Inner City Press
live tweeted Day 1 here,
podcast here,
vlog here.
After a mistrial, a re-trial
has opening argument on
November 2, 2022. Inner City
Press live tweeted here
and below.
On November 3,
Iconix former general counsel
testified that Cole was a
"tyrannical" control freak,
over multiple objections, here
OK - US v. Neil
Cole of Iconix re-trial
continues, M&A lawyer
Jason Schaefer is the US'
witness
AUSA: You were
the General Counsel of Iconix.
Where was it located?
Schaefer: 1450
Broadway in Manhattan.
AUSA: And in this photo, of
Neil Cole's office with the
window, what about the office
next door?
Schaefer: It was
Blumberg's office, with the
basketball.
AUSA: What
was Neil Cole's management
style?
Schaefer:
Tyrannical. Constantly calling
me names --
Cole's counsel:
Your Honor, could we have a
sidebar? [Whispered sidebar
ensues]
[After
sidebar] AUSA: Let's just
focus on Neil Cole's
management of the business,
how was that? Schaefer: Also
tyrannical.
AUSA: Did you use
your professional knowledge?
Schaefer: No. He used me as a
scrivener. [Dickensian echoes
here]
Schaefer: Neil
Cole always spoke about the
accounting implication of
every move Iconix made.
AUSA: Tell me
about the Southeast Asia
deals. Schaefer: Iconix
reached that deal after I was
general counsel. But I played
no role in it.
The trial
continues...
The opening
argument:
OK - it's US v
Neil Cole of Iconix, re-trial
opening arguments.
Assistant US
Attorney: Neil Cole came up
with a marketing expenses
cover story to allow him to
make these payments, in a
dirty deal. Using the same
play book, instead of $5
million, he took it up to $6
million
AUSA: After
Iconix reported its revenues,
he turned around days later
and sold tens of millions of
dollars in shares. But around
that same time, the SEC began
focusing on Iconix.
AUSA:
Another Iconix executive went
to authorities. And now Neil
Cole stands here, the
defendant. You will be able to
follow the money. I wish I
could tell you it was going to
simple, a few witnesses and
sheets of paper. But this was
a scheme
AUSA: You are
going to see secret ledgers,
hidden from Iconix' lawyers
and accountants, and
investors. You will see emails
to and from Cole himself,
updating him on the fraud. You
will here from those who
negotiated the dirty deals.
AUSA: This
executive will testify under
court-ordered immunity. You
will hear how Cole disguised
the dirty deals, falsely
certifying that there were no
side promises. You'll hear
from the COO - he committed
serious Federal crimes. But
he's pled guilty
AUSA: He has an
agreement to receive
preferential treatment at
sentencing. You should
scrutinize his testimony -
you'll see it is backed up.
Listen to the evidence. Listen
to Judge Ramos on the law,
apply common sense and you
will find Neil Cole guilty.
Thank you
Cole's
lawyer Mr. Hecker: Neil Cole
is innocent. We've waited a
long time to say that so I'm
going to say it again: Neil
Cole is innocent. On Dec 4,
2019, his life changed. He was
wrongly charged. Now he
finally gets his day in court.
[Note: This is a retrial]
Hecker:
Iconix was one of the largest
branding companies in the
world, on NASDAQ. Neil &
his wife life in Manhattan
with a high school aged
daughter. Charles Cole, his
father, made shoes and his
brother Kenneth Cole who may
be familiar to some of you is
a designer
Hecker:
Iconix owned the names to
Starter, Roc-a-wear and
others. Iconix owned the logo.
Nike sells shoes for $200,
those without the swoosh is
cheaper. [echo of Avenatti
Nike extortion trial]
Hecker: The
Starter hats, athletes wear
them. They are iconic. Hence
the name, Iconix. But the
actual products are made by
Wal-Mart. Iconix licenses them
the brand: Starter-branded
jackets at Wal-Mart, both
sides make money. Hecker:
Iconix had deals in 70
countries. Neil worked hard,
make brands relevant again.
It's like driving around
looking for run down real
estate. [Gentrification of
brands]
Hecker: Gucci
& IKEA, they are known
here. How could Iconix
introduce US brands overseas?
Hecker:
Iconix worked with Lee &
Fung, & paid a $2 million
consulting fee. It wasn't
secret. It wasn't hidden from
anyone. [Echo of
argument Nikola's Trevor
Milton made in recent trial
also before Judge Ramos, that
his claims were public
Hecker: This is
the key - the US is asking you
to convict Neil Cole based on
the word of Seth Horowitz,
with his motive to lie to save
himself. [From last trial:
#Whorowitz....
Now in US
v. Neil Cole, as defense is
conducting cross examination,
AUSA says the question is
trying to elicit hearsay.
Whispered sidebar ensued.
The dispute
is on admissibility of info
from the "Special Committee."
Judge Ramos suggests the
witness be asked, Did they
come a time that your opinion
of Mr. Cole changed? When?
What caused it? Defense: The
government should not talk to
the witness overnight
Judge Ramos: You
don't need to speak with him
overnight. You can lead him on
re-direct and I'll overrule
objections. See you tomorrow.
In the first
trial, back on October 25,
2021 Cole himself took the
stand, see below.
After starting
deliberations on October 27,
the jury at 2:30 on October 28
said they are at an impasse
and unable to reach a verdict
that day - they left at 3 pm
and will resume on Friday,
October 29. From the cryptic
note, it seems there may be
more than one juror
considering acquittal, at
least on some counts.
Near 2pm on
Friday, October 29, the jury
sent a note that Juror 4 would
not return on Monday. But on
Monday, November 1 a partial
(not guilty) verdict, on the
conspiracy counts. Later, the
jury returned deadlocked on
eight other counts, triggering
a mistrial, as "multiple
jurors" were still "standing
strong in their convictions."
about the case. Inner
City Press asked, Will Cole be
retried on securities fraud,
making false filings with the
SEC and improperly influencing
audits?
On November 12,
the US indicated it had not
decided.
On January 21,
2022 the US wrote it to say
"it intends to seek a retrial"
on Counts Two through Nine.
On October 30,
2022, on the eve of the
re-trial, the US specified its
opposition to Cole's
subpoenas: "The Court’s prior
opinion in this case did not,
however, hold that all
impeachment materials sought
by trial subpoenas were
necessarily “admissible”
within the meaning of Nixon,
as Cole now argues."
On November 1,
after the 15 jurors (including
three alternates) were picked
in two full days of jury
selection and left for the
day, the sides fought about
slides for their openings.
Inner City Press live tweeted
it here:
For US v Neil
Cole retrial, now with jury
selected & gone for the
day, the arguments start.
Defense:
The negotiations were led by
Mr. Horowitz. The deal didn't
close until Oct 1. I'll hand
up the unredacted version.
Judge Ramos: I
don't understand the objection
about it being too late in the
process. It's not hearsay. I
will allow it. Is the next one
about government cooperator?
AUSA: It's a big red slide, to
say, Horowitz is a bad person.
Defense: We can change the
color.
Judge Ramos: Why
don't you. I'll allow the
slide. The next is an
organizational chart. What's
the objection? AUSA: We
wouldn't have a slide saying
"GUILTY" - but if they want to
try it.... Defense: I don't
get it. Are they saying our
slide means Not-guilty?
After
estimates of 20 and 35 minutes
for opening statements, Judge
Ramos says, Try to not go
beyond, I'll look very
unhappy. Lawyers laugh -
politely or nervously. When
Horowitz: Direct this week,
cross next.
Watch this site.
Back on October
29, 2021 Inner City Press live
tweeted here:
jury note says
they must leave at 3, jurors
standing firm, and Juror 4 not
returning next week. They ask
if can render verdict on some
not all charges. "If same
jury," Judge Ramos says.
Judge Ramos: I
don't know if we can have one
jury reach decision on some
charges and other jury [with 1
alternate added] on others.
I'm thinking, No. Do you have
Allen charges ready? Counsel:
It's too early for that.
[It's 1:46 pm and jurors are
leaving at 3...]
Jury
entering! Judge Ramos: You're
asked if you can reach a
unanimous verdict as to some
counts but not others. But we
don't want a partial verdict
with this 12, and another with
another 12. Juror 4 [he is
named, but we don't], please
some to sidebar
After a long
sidebar, Judge Ramos tells
jury: Yes, you can reach
unanimous verdicts on some
counts. But we'd like you to
continue deliberating on
others. So, go and continue.
Jury exits.
Judge Ramos
is asked to them them another
note. Defense suggests: "Each
separate count must be
evaluated separately based on
the evidence or lack of
evidence." Judge Ramos does
it. US has not
objection. Judge Ramos:
This will be provided to the
jury.
On October
7, cooperator Seth Horowitz
spend the whole day on the
stand, still on direct. Inner
City Press live tweeted here.
On October
8, the cross examination of
Horowitz began, doggedly.
Inner City Press live tweeted
here.
On October 12,
after Columbus Day, the cross
examination of Horowitz
continued but did not finish.
Inner City Press live tweeted
here
and below.
On Sunday,
October 17 the US Attorney's
Office put in an argument for
the admissibility of exhibits
including Ethan Cole's e-mail
to Jared Margolis about
offsetting Iconix Korea
with... Rocawear. Full
contested exhibit on Patreon here.
On Monday
October 18 Cole's lawyers
responded that Ethan Cole was
not a co-conspirator, and
filed Horowitz' FBI's
interview as 3500 material.
3500 material / FBI interview
notes now on Patreon here.
On October 22,
the trial churned to the end
of the government case, with
the defense to put on its
first witness on Monday, but
still not providing the name.
Inner City Press live tweeted
here.
On October 25,
Neil Cole took the stand and
Inner City Press live tweeted
here.
On October 26
here's from the US Attorney's
Office summation, which Inner
City Press live tweeted here:
Closing arguments
in US v. Neil Cole: Assistant
US Attorney asks why
"visionary CEO of Iconix"
agreed to pay $2 million to a
consultant for no work.
#RoundTripping.
AUSA: Cole signed
the invoices to sent $5
million back. This is a
catastrophic fact. We saw him
yesterday, criticizing
people's costs at the Super
Bowl. And yet he's signing
fraudulent $5 million in
invoices.
AUSA:
Iconix had already paid for
this marketing video (Zoo York
Takes Yankee Stadium, on
YouTube here;
DX 415) before the paid the
invoice.
AUSA: Neil Cole
did it.
Judge
Ramos: We're going to end,
because the defense summation
would take us past 2:40 pm.
Tomorrow afternoon- you'll be
able to stay past 2:40 if you
want. See you tomorrow.
On the morning of
October 27, Neil Cole's lawyer
offered this summation, Inner
City Press live tweeted here:
Cole's lawyer:
Iconix's servers saved all
emails, even if Horowitz says
he deleted them. "Horowitz
made it up and they know it.
If he'd lie about that, he'd
lie about anything. And that
should make you doubt their
case."
Cole's lawyer:
"They're dredging up things
from 22 years ago. [Candie's
$75,000 SEC settlement]
Give me a break.
Horowitz just wants a lighter
sentence. He claims he wrote
in code to himself. It's
absurd." Cole's lawyer's
closing is closing: "Neil Cole
did not commit any crimes. We
ask you find him not guilty."
Judge Ramos:
Thank you Mr. Tarlow.
Note: in open
court, Cole's lawyer said he wants to cross
examining cooperation witness Seth Horowitz
about concealment of prostitution related
activities. Judge Ramos said that question
will not be allowed - and when the Assistant
US Attorney asked to seal the transcript,
Judge Ramos agreed. But it was in open
court. Can you say, #Whorowitz?
On September 30
in an in-person final pre
trial conference, Cole's
lawyer argued that hearing
"$28 million" would be
prejudicial. The AUSA said it
show motive, and Judge Ramos
agreed, citing US v.
Quattrone, 441 F.3d 153,
179-80 (2d Cir. 2006).
Inner City
Press will continue to cover
the trial.
Watch this site.
The case is US v. Cole, 19-cr-869
(Ramos).
***
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