The Washington times., 1938-12-30
AUDITING FIRM
FACES SEC QUIZ
IN DRUG FRAUD
Public Hearings to Be
Held in N. Y. Thursday

IICIO III M - IIIOI SOOy
NEW YORK, Dec. 80 (IN.S)
The Securities and Exchange Com
mission re-entered the McKesson
g. Robbins case today as Federal
authorities moved to arraign two
more men arrested as alleged
blackmailers Of the drug firms
president, "F. Donald Coster," who
committed suicide when he was
exposed as Swindler Philip M. Mu-
sica.
Beginning next Thursday the
SEC will conduct public hearings
in New York on the manner in
which Price, Waterhouse & Co.
audited the books of McKeSson &
Robbins. "CoSter" and three of
his brothers allegedly swindled the
firm out Of nearly $4,000,000 by
manipulating its finances and
pyramiding its assets.
CRATER'S NAME LINKED
Directors of the century-old drug
concern, some of whom staged an
unsuccessful revolt against the
masquerading president in 1884,
now are being grilled by Assistant
State Attorney General Ambrose
Mccall.
The New York Journal and
American stated today that the
name Of Joseph Force Crater, New
York supreme court justice, who
has been missing since 1880, has
been injected into the "Coster"
probe.
Bringing the total number Of
persons arrested for allegedly eX-
torting money from "Coster" to
five, two Brooklyn men, Michael
Petrella, 40, and Joseph Para
scsndola, ST, were picked up last
night.
Petrella was named by Assistant
D. S. Attorney Irving R. Kaufman
as the finger man" in the black
mail scheme, but the prisoner
fatty denied he ever knew
"Coster." It was said ParaScan-
dola's role was of a minor nature.
TRIO UNDER ARREST
Previously arrested on charges
Of forcing Coster to pay hush
money so that his alias and crlml-
nal past would not be revealed
were Walter H. Cragg, disbarred
attorney, Mary Brandino, and her
brother, Joseph.
The SEC hearings are designed
to reveal the character, detail and
scope of the audit procedure fol
lowed by Price, Waterhouse &
Company in preparing financial
statements included in the regis
tration of McKesSon & Robbins
with the Federal agency in 1884.
It is hoped the hearings also will
show how closely accepted stand
ards and requirements Of auditing
procedure were followed.
CRATER SHARED OFFICE
Linking of Crater's name with
the Musica family added mystery
to the case that becomes more
battling daily. The Journal and
American said that Crater used
an office also shared by CoSter
around 1920. adding:
"The natural presumption
that Crater and Musica knew
each other and may have had
business connections is sup
ported by another phase Of the
investigation. This has to do
with the disappearance, from
the vaults of the Federal Build
ing, of records dealing with the
human hair swindle Of Musica
the first of his criminal en-
terprises.
LAWYER FOR MOTHER
"In these records Crater's
name appeared as attorney for
Musica's mother in a bank
ruptcy action. Crater repre-
sented MuSica's mother after
Musica, his father, three broth
ers and two sisters were seized
as they were attempting to flee
to Honduras"
After pleading guilty at this
time to a swindle involving ST.
100000 Philip Musica went to jail,
but won his release within six
months. He then started mas
querading as Coster and in 1925
purchased control OF McKesson &
Robbins for a million dollars un-
der his alias.