Word: costerized
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Last week Dr. Coster and his crude drugs became the X and Y of a mystery-story equation. Other factors were forged Dun & Bradstreet reports, dummy trading companies, phantom warehouses, vanished inventories and missing assets...
...McKesson & Robbins, Inc., whose 1928 expansion was underwritten by Goldman, Sachs and Bond & Goodwin, Dr. Coster transferred a private enterprise of his own, the business of trading in crude drugs from far places-China wood oil, camphor from Japan, Javanese quinine. McKesson & Robbins' crude drug department was very much the private concern of President F. Donald Coster...
Frank Donald Coster graduated from Heidelberg with an M.D. and a Ph.D., practiced medicine in New York City from 1912 to 1914. He quit practice to become president of Girard & Co., a small drug manufacturer owned by his mother's family. In 1926 he bought control of McKesson & Robbins, old and honored New York drug house, and made it the nucleus of a nationwide manufacturing and distributing business...
...mystery was in the crude drug department, which Dr. Coster ran with the help of Assistant Treasurer George E. Dietrich. Each year the department reported a nice inventory profit from its operations abroad and this profit was added to the inventories and accounts receivable on the books. Accountants Price, Waterhouse & Co. certified that the inventories had been "certified ... by responsible officials" without certifying the inventories themselves...
Last month, while checking up on inventory insurance, Treasurer Thompson found that the insurance did not cover crude drug inventories. Dr. Coster told him the insurance was handled by W. W. Smith & Co., the company's Montreal agent. Mr. Thompson found several Dun & Bradstreet reports in the company files showing W. W. Smith to be a worldwide trading company with assets of between $6,000,000 and $7,000,000. Suspicious Mr. Thompson went to Dun & Bradstreet and was told the reports were forgeries. Next Mr. Thompson began checking up on W. W. Smith and on another Montreal firm...