The founder and former CEO of Iconix Brand Group Inc. has been indicted in an alleged accounting and securities fraud scheme at the New York-based brand licensing firm, after another former senior executive pleaded guilty to similar charges earlier in the week.

Manhattan federal prosecutors on Thursday said that Neil Cole, who resigned as Iconix's chief executive in 2015, had plotted to pump up key financial metrics that investors used to assess whether the company was growing, and later tried to scuttle a regulatory probe into Iconix's accounting practices.

The announcement came as the U.S. Attorney's Office for the Southern District of New York announced the unsealing of charges against Seth Horowitz, the firm's former chief operating officer who pleaded guilty Monday to five counts of securities fraud, making false filings and other charges and was cooperating with the government.

According to an unsealed indictment, Cole and Horowitz between 2013 and 2014 convinced an unnamed Chinese firm to pay artificially inflated prices for its brands, which include Joe Boxer, London Fog and Jay-Z's Rocawear, on the promise that it would be reimbursed by Iconix for the overpayments.

The executives then used proceeds from the "round-trip" transactions to beef up Iconix's revenue and earnings-per-share figures, to give the appearance that Iconix was experiencing quarter-after-quarter growth, the indictment said. Prosecutors, however, alleged that without the supposedly fraudulent scheme, Iconix would have missed its quarterly revenue benchmarks for the second and third quarters of 2014, as well as its annual revenue consensus for the full 2014 financial year.

When the U.S. Securities and Exchange Commission's Corporate Finance division launched an investigation in late 2015, Cole tried to destroy evidence and delete emails related to the probe, the filing said.

"Now Neil Cole is in custody and facing serious criminal charges for his alleged conduct," U.S. Attorney Geoffrey Berman said in a brief statement announcing the charges. "This is the third accounting fraud case brought by our office in the last four months, which illustrates both the pervasiveness of this crime and my office's commitment to policing it."

Cole was expected to be arraigned Thursday before a federal magistrate judge.

His attorneys, Paul, Weiss, Rifkind, Wharton & Garrison partners Lorin L. Reisner and Richard C. Tarlowe, said their client had "acted lawfully and properly in all respects, and this case should not have been brought."

"All of the transactions at issue were fully reviewed and approved by Iconix's legal, finance and accounting professionals, and Mr. Cole reasonably relied on those professionals," they said in a statement.

"Good faith business conduct by a senior business executive should not be criminalized. These charges are completely baseless," the attorneys said.

An attorney for Horowitz did not immediately return a call seeking comment on the cases.

The SEC on Thursday also filed two separate civil actions stemming from the same scandal—one against Cole and Horowitz and the other against Iconix.

"Today's actions reflect our efforts to hold companies and executives accountable and obtain meaningful relief for investors," Anita B. Bandy, associate director of the SEC's enforcement division, said in a statement.

The company, headquartered in Midtown Manhattan, agreed to pay a $5.5 million penalty settle the civil case against it, and did not admit to any wrongdoing. In the years since the SEC's investigation was disclosed, Iconix had overhauled its executive leadership and had "taken significant steps to remediate and strengthen the Company's compliance and reporting functions."

"I am pleased that we were able to resolve this legacy matter that arose under previous management over four years ago," Bob Galvin, Iconix's president and CEO said in a statement. "Working alongside our board of directors over the past several years, Iconix has put in place significant, additional measures to ensure that the company's financial reporting, compliance, and governance practices fully meet legal and good governance standards."

The company did not comment on the criminal or civil charges against Cole and Horowitz.

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