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The new Cotton Club continued to thrive before the summer of 1939, once the Internal Revenue Service hit the club’s management with indictments for income tax evasion. The indictments hit the Cotton Club Management Corp, including Herman Stark – President, George Goodrich, — Accountant, and Noah Braustein – Secretary-Treasurer, with four counts of failure to pay, and embezzlement of income tax. If convicted, all three men could face up to 25 years in prison, and fines of considerably $20,000 apiece. Amazingly, because he was just listed the employee, Frenchy DeMange escaped the indictment. At trial, the Cotton Club Management Corp. uncovered guilty, however the three officers escaped sentence. Still, Stark had to fork over a hefty fine to the government, files $3,400 owed in back taxes.
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