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In Retrial of Former Iconix Neil Cole Former GC Calls Cole a Tyrannical Control Freak Over Objections

By Matthew Russell Lee, Patreon Song Vlog Podcast
BBC - Guardian UK - Honduras - The Source

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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