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The new Cotton Club continued to thrive until the summer of 1939, when 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 taxation. If convicted, all three men could address 25 years in prison, and fines of to around $20,000 each. Amazingly, because he was just listed regarding employee, Frenchy DeMange escaped the indictment. At trial, the Cotton Club Management Corp. discovered guilty, however the three officers escaped certainty. Still, Stark had to fork over a hefty fine to the government, have more $3,400 owed in back taxes.

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