Moving Forward, Looking Back / Fairfield's great imposter and world-class swindler
Published 8:13 am, Friday, June 7, 2013
Fairfield, Conn., has a substantial article in Wikipedia, including a lengthy list of notable people -- natives and residents who made their marks in a wide variety of fields. But there's a glaring omission.
No, not Michael Bolton or Meadowlark Lemon, though they are at least as deserving as "Ricky" Ullman. I'm thinking of the only Fairfielder ever asked by a major party to run for president of the United States while personally overseeing an extraordinary financial scam.
In 1937, a delegation of Republican Party insiders visited F. Donald Coster, M.D., Ph.D., at his Italianate villa at 400 Mill Plain Road to beseech him to run for president in 1940. The acclaimed head of the Fairfield-based pharmaceutical giant McKesson & Robbins expressed his appreciation for the offer, but declined. Little did the disappointed group realize how lucky they were to be turned down.
On Dec. 16, 1938, as news of a huge scandal at McKesson & Robbins broke, Coster went into his bathroom and shot himself dead. Within the day, the authorities determined that F. Donald Coster, M.D., Ph.D. was previously Frank D. Costa, who was previously William Johnson, who was actually Philip Musica, a twice-convicted swindler and bootlegger from New York City's Lower East Side. The sensational fraud led directly to a major overhaul of public accounting methods.
How did Musica get to Fairfield and build one of the biggest companies in the country? It's a cautionary tale of the willfully gullible being no match for audacity and cunning.
Philip Musica was born in 1884 in a Lower East Side tenement to an immigrant family. He left school at age 14 to work in his father's grocery store. Within a few years, he made A. Musica & Son into a successful importer of Italian food -- by bribing dock officials to drastically fudge the weights of his imports. This landed him in prison, but amazingly, he was pardoned five months later by none other than President Taft. Back on the street, the undaunted young entrepreneur hatched a series of new ventures with a common theme: Financial chicanery under a legitimate veneer.
In 1913, he founded the U.S. Hair Co., an ingenious shell company that borrowed large sums of money against phony inventories of prized long-strand hair. U.S. Hair collapsed, and Musica was back in jail. He made good use of his prison time, earning an early release by becoming a stool pigeon for the New York City district attorney's office. He kept informing for the D.A. under the name of William Johnson, but he had bigger ideas.
In the 1920s, as Frank D. Costa and then as F. Donald Coster, he started two successive companies specializing in alcohol-based pharmaceutical products prized by bootleggers for obvious reasons. By 1925, Coster's A. Girard & Co. gained permission to legally purchase 25,000 gallons of alcohol a month for ... uh ... hair tonic. His Westchester facility would no longer do, but the deserted Hawthorne Manufacturing Co. plant on Grasmere Avenue in Fairfield was attractive for two reasons: A larger manufacturing space and the chance for Coster to put more distance between him and his New York rap sheet. And so it was that Fairfield became the home of the shady A. Girard & Co. and F. Donald Coster, M.D., Ph.D.
Settling into his estate on Mill Plain Road, Coster promptly raised a million dollars to acquire the venerable but struggling New York-based McKesson & Robbins pharmaceutical company. The merged company kept the more dignified name of McKesson & Robbins and consolidated its legitimate, and not so legitimate, operations in Fairfield.
How did he pull this off? Coster, the charming imposter with make-believe doctorates from the University of Heidelberg, simply fleeced a crowd of fawning local financiers. One of his easiest marks was Clinton Barnum Seeley, a bank president who apparently forgot what his grandfather, P.T. Barnum, famously observed about how many suckers there were in the world. Another was Fairfield aristocrat Oliver Gould Jennings, who served cluelessly on the McKesson & Robbins board and owned 5,000 shares of stock when he died in 1936.
McKesson & Robbins thrived during the Depression, mainly by wildly overstating the company's assets. Coster personally managed a secretive Canadian subsidiary that did a lucrative but completely imaginary global business in "crude drugs." The meticulously run scam fooled company officials and auditors for years. In all, the operation added about $18 million of vapor to the company's books, with fabricated transactions run through a sham bank whose agent, one George Vernard, was actually Arthur Musica, another brother.
Finally, in 1938, an increasingly suspicious company officer brought Philip Musica's empire down. A retired physician told me that as a 13-year old, he watched while a hearse took Musica's body away from his villa, now the site of the Carolton Convalescent Home. Home Depot now sells home supplies where the McKesson plant made hair tonic for bootleggers.
McKesson & Robbins survived the scandal, but the website of California-based McKesson Corp., a Fortune 500 health-care information company, makes no mention of its notorious ancestor.
Highly recommended: "Magnificent Masquerade," by Charles Keats, 1964, for a very rich account.
Ron Blumenfeld is a Fairfield writer and retired pediatrician. His "Moving Forward, Looking Back" appears every other Wednesday. He can be reached at email@example.com.