The Waterbury Democrat., 1939-03-31
doing in connection with the charges made against me-"
 Shocks City Peoule

UOlIlB III COIlIlcCIlUl WILL tIlc CIldI ScS made against me-"
 Shocks City People
 Word of indictment of the Water bury broker, long prominent in city affairs, financial and social, came as a shock to thousands in the city. On the other hand, hundreds of Water bury stockholders in McKesson & Robbins, holding several hundred thousand dollars worth of the col- lateral at prices many times the last quotation of the common and pre- ferred stocks before they were or- dered taken from the board by the New York stock exchange, contem- plated stockholders meeting here and engaging of an attorney to rep- resent their interests.
 MT. Phillips and the Griggs Go. underwrote one-third of the millions of dollars stock issue by which Cos ter-Musica acquired control of the McKesson & Robbins drug firm in 1926 and about one-fourth of the million dollar issue by which Musica founded McKesson & Robbins, Ltd, of Canada, a corporation which, it is alleged, existed on paper only. The Waterbury broker was director of the Canadian and the Maryland McKesson & Robbins company and the Griggs Go. recommended the stock of the companies to investors throughout 8 dozen years.
 Government Picks 8 Few
 The government, through the grand jury at New York, has se- lected a few stockholders of the many thousands as victims of al- lege fraud, claiming that financial reports of both the Mary land and Canadian companies contained false items of inventory, accounts receiv- able, cash in banks, sales, earnings and profits.
 The first ten counts against the nine defendants charge mail fraud. The next three counts charge that in 1886, 1897, and last year the de- fendants violated the exchange act by filing false and misleading state- ments with the stock exchange.
 The last count charges 8 con- spiracy which is alleged to have started in January, 1925, when Cos ter-Musica obtained the financial backing of MT. Phillips and the Bridgeport bankers which allowed him to take over McKesson & Rob- bins.
 Mail Counts Serious
 Each of the mail fraud counts is punishable by five years imprison- ment and 8 $1,OOO fine. The SEC counts are punishable by imprison- ment for two years and a fine of $10,000 in each charge and the con- spiracy countrcarries two-year in1- prisonment penalty and 8 fine of $1OO00.
 All of the defendants are involved in the alleged conspiracy, mail fraud and other charges for one or more of 29 overt acts listed by the grand jury. Warrants were issued for the arrest of all of the defen- dants, although Simon already has been charged with blackmail impli- cations. The warrants will be served if any of the defendants fail to ap- pear in court Wednesday morning at 10 o'clock at New York.
 KIew Real Identity
 Simon is alleged to have been on the McKesson company payroll be- cause he knew the real identity of Coster- -Musica. The brothers of Mrs. Coster, John and Leonard Jenkins, are charged with part in the original conspiracy which is listed in 8 21-page indictment de- scribing the $21 100000 swindle of the McKesson & Robbins company and its stockholders.
 Special Report
 A special report from New York on the developments resulting ill the indictment remarked:
 The indictment, in twenty-one pages, traces the financial history of the drug firm from Nov. 10, 1926, when MuSica, an ex-convict who had assumed the name Coster and clothed 1t with responsibility, ac- quired control of the company until Dec. 16, when, his speculations and true identity revealed, he shot him. self to death in his Fairfield, Conn, home.
 The Canadian branch of McKes- son & Robbins, Ltd, was organized Oct. 28, 1927, to defraud the public through the safe of its stock, the indictment charges. Coster became president, treasurer and director of the Canadian branch; his brother, George, became secretary, assistant treasurer and @ director and Mer- win and Phillips, who were already directors of the parent firm, became direcors.
 The Canadian concern, it is al. legged, was organized specifically to sell the 10000 shares of preferred stock upon false representations. Merwin and Phillips allegedly placed themselves on the boards of the parent and Canadian companies to give the impression that the con- panteS were well managed, that their issues were sound investments and that their directors were per- forming all their duties and obliga- tions. Tn return for the 'perform- ance" of these duties, they received fees, salaries, bonuses and commits sions from the companies and the victimized stockholders, 1t is alleged.
 To further create an impression