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The new Cotton Club continued to thrive just before summer of 1939, as soon as 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 tax. If convicted, all three men could deal with 25 years in prison, and fines of roughly $20,000 each. Amazingly, because he was just listed a great employee, Frenchy DeMange escaped the indictment. At trial, the Cotton Club Management Corp. is discovered guilty, however the three officers escaped certainty. Still, Stark had to fork over a hefty fine to the government, as well $3,400 owed in back taxes.

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