When a Conspiracy Acquittal Necessarily Rejects the Core Factual Theory, Double Jeopardy Bars Retrial on Substantive Counts — United States v. Cole (2d Cir. 2025)

When a Conspiracy Acquittal Necessarily Rejects the Core Factual Theory, Double Jeopardy Bars Retrial on Substantive Counts — United States v. Cole (2d Cir. 2025)

Introduction

In United States v. Cole, the Second Circuit announced a consequential application of the Double Jeopardy Clause’s issue-preclusion doctrine to sequential white-collar prosecutions. The court held that where a prior jury’s conspiracy acquittal necessarily rejected the factual core of the government’s theory (here, that CEO Neil Cole made “secret deals” to engineer an “overpayments-for-givebacks” scheme), the government is constitutionally barred from retrying the defendant on related substantive counts premised on the same factual theory.

The case arises from two successive trials stemming from Iconix Brand Group’s 2014 transactions with Global Brands Group (GBG). After a 2021 jury acquitted Cole of a multi-object conspiracy (and a records-related conspiracy) but hung on the substantive counts, the government retried only the substantive counts in 2022 and obtained convictions. On appeal, Cole argued that the first jury necessarily decided that he had not made the alleged undisclosed “giveback” commitments; under the Double Jeopardy Clause’s issue-preclusion function, those convictions could not stand. The Second Circuit agreed, reversing and directing dismissal of the indictment.

The opinion clarifies how courts identify what a jury “necessarily decided” when it returns a mixed verdict, and it underscores the limits of post hoc speculation—particularly the government’s “object-split” and “no-agreement-but-collusion” theories—when the record reflects a single, indivisible factual proposition at the core of the case.

Summary of the Opinion

Applying de novo review, the Second Circuit used the familiar two-step framework: (1) identify what issues the acquitting jury necessarily decided, and (2) determine the effect of those decisions on the second prosecution. Examining the entire first-trial record “in a practical frame,” the court concluded that the only rational explanation for the 2021 conspiracy acquittal was that the jury rejected the government’s central factual premise: that Cole made undisclosed, verbal overpayments-for-givebacks agreements with GBG to inflate Iconix’s reported revenue.

The government advanced two alternative explanations to avoid preclusion: (a) perhaps the jury found no conspiratorial agreement even if it believed the underlying fraud occurred (suggesting Cole acted alone, or that aiding-and-abetting—but not conspiracy—occurred); and (b) perhaps the jury split on which object of the conspiracy (securities fraud, false SEC filings, or interference with audits) had been proved, leading to an acquittal under the court’s unanimity instruction. The panel rejected both as implausible on the record:

  • The scheme could not have been executed without, at minimum, an implicit agreement with Iconix’s COO, Seth Horowitz, whose conduct and communications pervaded the record; the aiding-and-abetting hypotheticals misfit the evidence.
  • The three charged objects were too tightly intertwined for a rational jury to conclude that there was an agreement to deceive auditors or the SEC without an agreement to commit securities fraud; the “object-split” hypothesis was thus “hypertechnical and unrealistic.”

Because the first jury necessarily decided that Cole did not make the “secret deals,” and because that factual theory was essential to all substantive counts at the 2022 retrial, issue preclusion barred the second prosecution. The court reversed, remanding with instructions to vacate the convictions and dismiss the indictment.

Analysis

Precedents Cited and Their Influence

  • Ashe v. Swenson, 397 U.S. 436 (1970) — The foundational case on the Double Jeopardy Clause’s issue-preclusion function. Ashe requires courts to determine what a prior jury “necessarily decided” by looking at “the record of the prior proceeding, taking into account the pleadings, evidence, charge, and other relevant matter” and to do so in a practical, not hypertechnical, way. Cole faithfully applies Ashe’s “practical frame” admonition to reject speculative explanations for acquittal that do not align with the evidentiary record and theory of the case.
  • Yeager v. United States, 557 U.S. 110 (2009) — Yeager instructs that hung counts are a legal nullity; a jury “speaks only through its verdict.” Cole relies on Yeager to discount inferences from the first jury’s deadlock on substantive counts and to preclude the government from using that deadlock to dilute the acquittal’s preclusive force.
  • Sealfon v. United States, 332 U.S. 575 (1948) — Sealfon recognizes that a conspiracy acquittal can preclude a subsequent substantive prosecution when the acquittal necessarily decides a pivotal factual issue. Cole follows Sealfon’s path, concluding that the conspiracy acquittal necessarily resolved the absence of “secret deals.”
  • United States v. Mespoulede, 597 F.2d 329 (2d Cir. 1979) — Provides the Second Circuit’s two-step analysis: identify the necessarily decided issue, then determine the effect on the subsequent case (complete bar vs. evidentiary limitation vs. no effect). Cole applies both steps and concludes that preclusion operates as a complete bar because the necessarily decided fact was essential to all substantive counts.
  • United States v. Hicks, 5 F.4th 270 (2d Cir. 2021) — Reaffirms the defendant’s “heavy” burden to show necessary decision, while recognizing that preclusion can bar retrial where the issue is an “essential element.” Cole illustrates that the burden, though heavy, is not insurmountable when the record presents a single animating factual dispute.
  • United States v. Jackson, 778 F.2d 933 (2d Cir. 1985), and United States v. Clark, 613 F.2d 391 (2d Cir. 1979) — Cases where a conspiracy acquittal did not bar substantive retrial because the defendant’s role was peripheral or because rationally different inferences could explain the acquittal. Cole distinguishes those cases: the government itself portrayed Cole as “the man in charge,” and the record inexorably tied Horowitz to any fraud.
  • United States v. Sharpsteen, 913 F.2d 59 (2d Cir. 1990), and United States v. Patino-Prado, 533 F.3d 304 (5th Cir. 2008) — On unanimity for multi-object conspiracies. Cole engages these authorities while rejecting the government’s “object-split” theory as inconsistent with the integrated nature of the objects in this case.
  • United States v. Tyler, 758 F.2d 66 (2d Cir. 1985), United States v. Delgado, 972 F.3d 63 (2d Cir. 2020), and United States v. Amiel, 95 F.3d 135 (2d Cir. 1996) — Clarify distinctions between conspiracy and aiding-and-abetting, and that tacit agreements can satisfy conspiracy. Cole leans on these distinctions to show why the government’s “aiding without agreement” hypotheticals are implausible given the scheme’s execution.
  • Allen v. United States, 164 U.S. 492 (1896) — Cited for the use of an Allen charge in the first trial. Not central to the holding but provides procedural context for the deadlock.

Legal Reasoning

The court’s analysis proceeds methodically under Mespoulede’s two-step test and Ashe’s instruction to avoid “hypertechnical” theorizing.

Step One: What did the first jury necessarily decide?

The panel canvassed the first trial record, emphasizing that the parties presented a binary dispute: did Cole make undisclosed verbal “giveback” commitments or not? The government itself framed the “central question” as whether there were “secret agreements.” Many peripheral facts were uncontested (e.g., price increases in SEA-2 and SEA-3 shortly before quarter-end; inflated revenue claims; absence of written “giveback” terms; later “marketing” invoices).

Against that backdrop, the panel confronted the government’s alternative explanations:

  • No agreement but collusion/aiding-and-abetting: The court found it “inconceivable” that a reasonable jury could find that Cole executed the scheme without an agreement with Horowitz. Horowitz’s testimony—both its substance and ubiquity—left no rational path to a finding that any “secret deal” existed but that Horowitz was not a co-conspirator. Even setting Horowitz’s cooperation testimony aside, the documentary record and third-party testimony indisputably placed Horowitz at the center of the transactions. The aiding-and-abetting permutations (Horowitz aided Cole; Cole aided Horowitz) could not square with the evidence and the government’s own depiction of Cole as the scheme’s leader.
  • Object-split acquittal: The district court’s unanimity instruction stated that if jurors could not unanimously agree on which object had been proved, they “must” acquit on the conspiracy count. The panel acknowledged this formulation (and even noted that other courts phrase it as “may not find the defendant guilty,” which would result in a hung jury rather than an acquittal), but it declined to rest its decision on instructional error. Instead, it held that, practically speaking, the objects were too intertwined to permit a rational jury to find an agreement to deceive auditors or the SEC without an agreement to commit securities fraud. The government’s “auditor-only” hypothetical lacked evidentiary support; the lies to auditors and the SEC were instrumental means to the fraud on investors, not ends in themselves.

The only plausible reading of the acquittal, therefore, was that the jury necessarily rejected the existence of the alleged “secret deals.”

Step Two: What is the effect on the second trial?

Once the necessarily decided fact was identified—the non-existence of the overpayments-for-givebacks agreements—the effect was straightforward. The government conceded that its substantive case at the 2022 trial depended on proving those very agreements. When the necessarily decided issue is essential to the later prosecution, Yeager and Hicks dictate that retrial is barred, not merely that some evidence is excluded. The panel therefore reversed and remanded with instructions to vacate the convictions and dismiss the indictment.

Impact

Cole’s significance will be felt across several vectors of criminal practice, particularly in complex white-collar cases:

  • Reaffirmed rigor of issue preclusion: The decision underscores that courts must interrogate the record to identify what the jury necessarily decided, eschewing speculative “could have” narratives that are unmoored from the evidentiary and argumentative core of the case. Where a single factual proposition animates all counts, an acquittal on one count can have sweeping preclusive effect.
  • Limits on retrial after mixed verdicts: Yeager’s principle that hung counts are irrelevant is vividly enforced here. Prosecutors cannot leverage a deadlock on substantive counts to retry a factual theory the jury has already rejected via a conspiracy acquittal.
  • Charging and trial strategy in multi-object conspiracies: When objects are functionally “means” to a primary objective (e.g., deceiving auditors and the SEC to facilitate securities fraud), courts will be skeptical that jurors rationally found an agreement as to a subsidiary object but not the core objective. Prosecutors should draft charges and deliver summations with that integration in mind; defense counsel should press the indivisibility of objects where the evidence supports it.
  • Aiding-and-abetting as a fallback theory: Cole cautions that aiding-and-abetting cannot rescue a retrial if the first jury necessarily rejected the underlying factual theory. Where the alleged conduct cannot be committed “solo” and necessarily implies concerted activity (even tacit), an acquittal on conspiracy may preclude relitigation of the same core facts under aiding-and-abetting labels.
  • Language policing at retrial is not enough: The district court allowed a second trial so long as the government avoided the word “conspiracy,” even as it used synonyms like “crew” and “partners.” Cole makes clear that semantics cannot evade the Double Jeopardy Clause; issue preclusion turns on substance, not labels.
  • Jury instruction drafting: Although the panel did not resolve whether “must acquit” is an optimal instruction for multi-object unanimity, Cole highlights the practical stakes. District courts should prefer formulations that avoid converting a lack of unanimity on objects into an outright acquittal, unless governing circuit law compels otherwise.
  • Appellate practice: The court criticized the government for relying on the post hoc presentence report rather than the trial record to describe conduct. Practitioners should ground issue-preclusion analyses in transcripts, exhibits, and jury instructions from the relevant trial.

Complex Concepts Simplified

  • Double Jeopardy’s issue preclusion vs. claim preclusion:
    • Issue preclusion (collateral estoppel) prevents the government from relitigating a factual issue that a prior acquittal necessarily decided in the defendant’s favor, even in a different count or case.
    • Claim preclusion (Blockburger) bars successive prosecutions for the “same offense” when each offense does not require proof of an additional element. Cole concerns issue preclusion, not claim preclusion.
  • “Necessarily decided”:
    • Court asks: What is the only rational way to understand the jury’s acquittal, considering the pleadings, evidence, and instructions?
    • Speculative or “hypertechnical” possibilities do not defeat preclusion if they are inconsistent with the record and theory put to the jury.
  • Hung counts:
    • A hung count is not a “verdict” and thus provides no basis to infer what the jury believed; it cannot dilute an acquittal’s preclusive effect.
  • Multi-object conspiracy and unanimity:
    • Jurors must unanimously agree on at least one object of a multi-object conspiracy to convict. Some instructions say that if jurors cannot agree on an object, they cannot convict (leading to a hung count), while others—like in Cole—have told jurors they “must acquit.”
    • In practice, where the objects are functionally intertwined, a purported “object-only” split may be implausible.
  • Conspiracy vs. aiding-and-abetting:
    • Conspiracy is an agreement (express or tacit) to commit an unlawful objective. Aiding-and-abetting is not a separate offense; it is a way to hold a person liable for a substantive crime if they intentionally assist it.
    • In some schemes, the assistance is so integral and coordinated that aiding-and-abetting presupposes an agreement, collapsing the distinction for preclusion purposes.
  • “Roundtripping”:
    • In accounting, “roundtripping” refers to circular flows of money that inflate revenue without substantive economic change. The government suggested auditors had warned about this; the panel found no evidence that “evading auditors” was a standalone object divorced from defrauding investors.

Conclusion

United States v. Cole reinforces a robust and practical application of the Double Jeopardy Clause’s issue-preclusion doctrine in complex financial prosecutions. After a meticulous review of the first trial’s record, the Second Circuit held that the 2021 conspiracy acquittal necessarily rejected the existence of the alleged “secret deals.” Because that factual premise was indispensable to each substantive offense retried in 2022, the second prosecution was constitutionally barred. The court reversed the convictions and directed dismissal of the indictment.

The ruling offers clear guidance: when a prior jury’s acquittal necessarily resolves the core factual dispute, neither semantic rebranding nor speculative alternative theories can justify a retrial on counts that depend on the same factual nucleus. Prosecutors must craft charges and arguments with an eye toward how objects interrelate, while defense counsel should leverage the indivisibility of factual theories to protect clients from successive prosecutions. Above all, Cole vindicates the finality of acquittals and the constitutional guarantee against being twice put in jeopardy for the same alleged conduct.

Case Details

Year: 2025
Court: Court of Appeals for the Second Circuit

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