ALLEGED FRAUDS

Wairarapa Times-Age, 17 December 1938, Page 7

ALLEGED FRAUDS

SENSATIONAL CASE IN U.S.A. IDENTIFICATION OF ARRESTED MAN. CENTRAL FIGURE IN EARLIER SWINDLES. By Telegraph—Press Association—Copyright. NEW YORK. December 16. A sensation was caused here today when the police identified F. Donald Coster, president of McKesson and Robbins, who has been arrested in connection with the alleged fraudulent withdrawal of 18.000,000 dollars from the firm’s assets, as Philip Musica, the central figure in the famed "human hair” swindle of 25 years ago. McKesson and Robbins, one of the largest drug and chemical firms in American, was recently declared bankrupt.

Musica was convicted in 1913 of a 2,000,000-dollar swindle involving the United States Hair Company. He received suspended sentence after assisting the authorities in tracing the firm’s losses.

The similarity in the methods of Coster and Musica caused the revelation and recalled incidents of one of the most amazing American swindle episodes.

Musica was also convicted earlier in his career of swindling the Government by means of false weights when, with his father, he had a large cheese importing business. He was also convicted of subornation and perjury in connection with murder.

His Who’s Who biography, written by himself as Coster, gave him a fictitious Heidleberg doctorate of philosophy and showed him to be a member of the most fashionable clubs and one of the most prominent members of the New York financial community. Actually he was the son of an immigrant Italian barber.

The Federal Government is now investigating Coster’s activities in connection with vast illegal sales of apms to South America, and possibly Spain, .all shipped in McKesson and Robbins boxes marked “Milk of Magnesia.”

A cablegram published on December 8 stated that the bankruptcy of McKesson and Robbins, one of the largest drug and chemical firms in the United States of America, was expected to have an adverse effect on the business world. The market value of the stocks of the firm, whose assets were alleged to be 87,000,000 dollars, has dropped 30,000,000 dollars in the course of a few days on the Stock Exchange. A stock-holder’s suit alleging the fraudulent listing of assets, amounting to 10,000,000 dollars, precipitated an investigation disclosing many irregularities, including a warehouse allegedly maintained by the company in Canada, the only mailing address being New York.