The Waterbury Democrat., 1939-04-03
Special Grand Jury In Conn. McKesson Cases
(cuntipued from Paee ll

CCUnttpued conspiracy in the last three year. by making false statements tc the Securities Exchange Commis- Eion.y
 Local Attorneys Confer
 Meanwhile, several local attor- neys had under consideration today the merging of interests of a num- Der of stockholders in the Can- adian McKesson & Robbins, in which stock amounting to several hundred thousand dollars at earlier market prices was sold here by MT Phillips and the R. F. Griggs Co.
 A prominent attorney had under consideration 8 civil suit in behalf of q group of the stockholders but no notice of suit had been re- Ceived by the investment concern according to J. Warren Upson, Re- publican town chairman, who with Lawrence L. Lewis. former states attorney, represent MT. Phillips. MT Lewis was reported out of the city today but it was not learned whether he had gone to New York in behalf of his client.
 Phillips Appears Wednesday
 MT. Phillips IS scheduled to ap- pear in the New York federal court at lO:30 o'clock Wednesday morn- ing when bail will be set for the nine defendants on the charges al- ready placed.
 Francis T. Phillips, vice president, secretary and treasurer, and, accord ing to the annual report of the R. F. Griggs Co.,, filed with the town clerk, February g, "the agent or persons against whom any process should be served" in behalf of the company, was unavailable for com- ment on the matter.
 Further Particulars
 Further particulars in the indict- ment of the local broker and eight others by the federal grand jury in connection with the conspiracy, mail fraud and SEC violations, with the charge that Phillips and Merwin held meetings with Coster- -Musica in 1930 and 1897 in New York, include the following:
 In the District Court of the Unit ed States for the Southern Dis trict of New York.
 Southern District of New York. Bs. The Grand Jurors for the United States of America duly empaneled and sworn in the District Court of the United States for the Southern District of New York and inquiring for that district on their oath present that:
 It was further a part of said scheme and artifice to defraud that to effectuate and lend color of actu- ality to the aforesaid fraudulent and fictitious purchases and sales the defendants, together with Philip M. Musica, would falsely and fraud ulently approve and cause to be ap- proved by the respective Board Of Directors of the Canadian, Connec- ticut and Maryland Corporations, resolutions approving the appoint ment of Manning & Company as a depository for the funds of the said corporations, and would cause and permit the said Manning & Com parry allegedly to collect, hold and discurse funds for and on behalf of th0 said Canadian, Connecticut and Maryland Corporations, which said collections, disbursements and carry ing of funds for and on account of the said Canadian, Connecticut and Maryland Corporations would be and were wholly fictitious and fraudu- lent.
 It was further a part of said scheme and artifice to defraud that the aforesaid defendants and Philip M. .Musica, would falsely and fraud ulently cause the Canadian, Con- necticut and Maryland Corporations to pay out of their respective re- sources and funds, money, fees and commissions to w. w. Smith & Company, W. w. Smith & Company, Ltd, and w. w. Smith & Company, Inc, for services which it was repre- sented such companies were per- forming and which in truth and in fact such companies were not per- forming and would otherwise falsely and fraudulently divert and cause to be diverted other monies of the aforesaid corporations, the exact manner and means of said diversions being to the Grand Jury unknown, all to the detriment of the victims.
 1t was further a part of said scheme and artifice to defraud that to effectuate and lend color Of actuality to the aforesaid fraudulent purchases and sales, the defendants, together with Philip M. Musica, would create and cause to be created and would permit to exist and continue in existence as authentic documents, papers and records of the Cana dian, Connecticut and Maryland Corporations, false and fraudulent documents, papers and records re- fiecting and pertaining to such false, fraudulent and fictitious purchases and sales.
 Fraudulent Belief
 It was further a part of said scheme and artifice to defraud that to.create and continue the false and fraudulent belief that the opera tiofls of the Canadian, Connecticut and Maryland Corporations were profitable, and to Hull the stockhold- CTS of said corporations into a sense of security, and to cause such stock holders and their victims to believe that their investments in the re- spective corporations were amply protected. the defendants, together with Philip M. Musica, would falsely and fradudulently cause to be paid dividends to the stockholders of the said corporations, and would falsely and fradulently represent and pre- tend to the said stockholders that the said dividends were paid out of earnings and profits of the respec- tive corporations as reported to the said stockholders, whereas in truth and in fact the said earnings and