The Waterbury Democrat., 1938-12-29
WAREHOUSES OF
 DRUGS PROBED
60 Engineers, Account ants Sent to Search "
 of Those Houses
BY EARL B. STEELE limited Press Staff COrrespOndent)

Limited Press Staff Correspondent
 New York, Dec. 29 (UP)-Engi- neers and accountants were dis patched Io all parts of the country today for a hurried inventory and audit of the 77 warehouses of Me- Kesson and Robbins, Inc, which will disclose the full damage done the drugs firm by its swindling president, 'F. Donald Coster'', who killed himself when he was exposed as Philip Musica, an ex-convict. The firm of Ford, Bacon and Davis, in- dustrial engineers, sent out 60 men. They will begin inventories simul- taneouSly Dec. 31 and will complete their appraisals in three days. Audi tors from s. D. Leidesdorf and com- pany will draw up a financial statement of McKeSson and Robbins as of the year-end. They were al- ready at work on the firms books.
 Assigned To Job
 William J. Wardan, sole trustee of the drugs firm, had federal district court assign the two agencies to the job yesterday. It was said to be the biggest industrial investigation of this nature ever attempted. Wardall said i've are taking nothing for granted. The two firms engaged for this investigation have been in- structed to make thorough and exhaustive check on all physical and financial aspects of the situation"
 It was known already that the company was short $18,000,0 ,000 of it's $86 800, 900 listed assets; that its crude drugs department supposed to own $1O,O00,00O worth of supplies and $8,OOO,000 in bills payable, was non-existent. Whether Coster-M ica's mismanagement, his sideline dealings in bootleg liquor and muni- tions, his payments to blackmailers who knew for 12 years that he was masquerading crook, had cost the firm anything more than that, will be determined soon after the first of the year.
 Three Held Under Bail
 Three persons charged with hav- ing blackmailed the swindler, were held yesterday under bail ranging from $5.OOO to $7,500, and fedora authorities said that the arrests o1 more suspected blackmailers were expected hourly Those held were Walter H. Cragg, 57, disbarreo lawyer; Joseph Brandino, 61, anc his sister, Mary Brandino, 37. They were charged under the fed eral Kidnapping law with having threatened Coster -Musica with ''vi- olence to his person and reputation in letters sent across a state line from New York to the Coster-Mus- ica home in Fairfield, Conn.
 Fued Among Directors The story of feud among Me Kesson and Robbins directors ir 1883 and an investigation that al most exposed the dummy crude drugs department then, was told al the state attorney generals public hearing yesterday by Waddill Catch ings, analyist and corporation ex' ecutive. Catchings, at salary O $5,000 month, completed his in vestigation except for the crud drugs department, which Coster Musica supervised jealously, ant operated as an autonomous brancl of the business. Coster- -Musica has been cooperating with him, he said until he asked for a detailed repor of the crude drugs department. The1 the trouble began.
 Evaded Catchings
 At first, Coster-M -Musica evadeC Catchings requests for detailed re ports by telling him to concentratt on the wholesale branch, whicl was causing so much trouble" Thil wholesale branch was comprised O the nationwide chain of store which Coster-Musica had added tt the firm in 1928, paying McKessor and Robbins stock for an interes in them. Most of these store owner. became officers or directors of Mo. Kesson and Robbins by virtue O their stock holdings, and Coster Musica was not able to dominat, them as he wished. There was { feud, therefore, between the whole saler group and the banker group which held stock as collateral. Tn, bankers were on CoSter-M -MuSicai ! side.
 Coster-Musica went to Charles F Michaels, then executive vice-presi. dent and now president of the com pany, and suggested that they hal Catchings investigation and "tak, joint control of the corporation, Catchings said.
 Michaels With President At the time, Michaels sided witt the swindling president, although he has testified that he was no aware of the irregularities until { few weeks ago. The upshot was that Catchings wrote to all directors anc ordered them to meet at the Roose' welt Hotel here in advance of tn, stockholders meeting, April 4, 1884 and vote on his resolution to ous the president.
 Coster-Musica countered by set ting up headquarters at the hote before the meeting and 'tdiSplayint extraordinary cleverness in setting one man against another, making each distrust the other and most eff, fectively maintaining his position. By this means, Coster- -Musics brought 8 majority of directors tt his side, including the bankers. Tht wholesalers voted with Catching! and were in minority.