Cold Con: Investigating Falsified History

This is the press release going out next week for the first event in our 75th Anniversary fundraising campaign:

Monday, April 14, 2014

Fairfield, CT – CT House Histories in conjunction with The Fairfield Museum and History Center will host a screening and slideshow presentation with filmmaker Robert Kalm on Wednesday, May 14, 2014, at 7PM. Kalm’s documentary Self Made: The American Dreams of Philip Musica investigates the biggest single fraud of the twentieth century, which culminated in Fairfield 75 years ago. The lecture and fundraising event is part of Fairfield’s 375th Anniversary Celebration.

Doctor Frank Donald Coster was a respected name in depression era America. He was CEO of pharmaceutical giant McKesson & Robbins, a Republican prospect for the 1940 presidential ticket, and host to Wall Street tycoons on the largest yacht on Long Island Sound. On the morning of December 16, 1938, federal agents arrived at Coster’s estate at 400 Mill Plain Road in Fairfield to arrest him on multiple charges, but Coster shot himself in an upstairs bathroom.

There was no equal to the McKesson & Robbins fraud in imagination or international scope until the Enron and Madoff scandals of the early twenty-first century. Unlike those recent white-collar crimes, McKesson’s was only a chapter in the much larger mystery of Doctor Frank Donald Coster aka Detective William Johnson aka convict Philip Musica. The complete, untold story of Philip and the Musica family is an astounding narrative of American history.

How do you trace the path of one of the most creative con artists that ever existed? How can you trust a single primary source document, when many of them are known forgeries? Emmy- winning producer Robert Kalm’s grandparents were both employees and relatives-by-marriage of Frank Donald Coster. Attendees will get a preview of the large collection of never-before-seen Musica artifacts gathered for the film, from family photos to McKesson’s papers.

Refreshments and a question and answer session will follow the presentation. The event will take place at The Fairfield Museum and History Center and is free and open to the public. Please RSVP at 203.259.1598. Donations will support the ongoing production of the documentary. For more information, or to make a tax-deductible contribution online, visit the documentary website at

Robert Kalm
Headless Media, LLC

Melanie Beal Marks
Principal Researcher
CT House Histories, LLC

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American Dream

by poet Kate Horowitz.

We wink at the fox
with the bird in his mouth;
“Clever fellow,” we say.
But outrage dawns
with the sunrise sight
of a vacancy
in the henhouse.

Kate wrote this after our first round of research on Philip at the National Archives.

Visit Kate’s blog Things Written Down for more poetry.

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Before there was Madoff, there was Musica

by Rob Varnon STAFF WRITER
Connecticut Post (Bridgeport, CT)
September 11, 2009

Click for PDF version.

Philip Musica and Bernard Madoff on the surface appear to be cut from the same cloth, 70 years apart.

In 1938, Frank Donald Coster, a man with a German medical degree, had been a pillar of the Fairfield community for more than 20 years. As the head of a national company, he was a job-creator, a money-maker and well-respected. But all that disappeared, along with nearly $18 million of assets, when authorities discovered that Coster was really a twice-convicted felon from Brooklyn named Philip Musica who hadn’t graduated high school. In December of 1938, Musica went into the bathroom of his Fairfield mansion and shot himself.

Author Kalm and subject Musica.

That no one seems to remember this scandal is part of what fascinates Fairfield resident Robert Kalm, an Emmy Award-winning producer, who was already researching the life of Musica when Bernard Madoff’s multi-billion dollar, multi-year Ponzi scheme was uncovered last year.

Kalm said what he’s found in Musica’s story is a complex and brilliant character that is far different from the sensational press accounts of the day. But he also found some significant similarities to the Madoff scandal that raises serious questions about American society.

Kalm has a direct connection to the Musica story. His great aunt married Musica’s younger brother, who was also involved in the 1938 fraud at McKesson & Robbins that dominated headlines of the day. His mother’s family also all worked for McKessons, which had a factory and office in Fairfield.

Two scandals 70 years apart

“Watching the Madoff thing has been amazing,” said Kalm, who is writing a book titled “American Swindle: The Evolution of the 20th Century’s Most Successful Con Man.” The manuscript, part of his masters of fine arts thesis at Western Connecticut University, is due by the end of December, and Kalm is still hard at work writing it. He’s looking for people in the area who might have known Musica and can talk about the man.

“Everything I found so far was about the scandal. They never really got behind the scenes. What he actually said to these people, how he pulled it off,” Kalm said.

Musica created fictitious revenues based on inventory from his warehouse operations to pump up his balancesheet. Like the Madoff scandal, Musica’s was uncovered when McKesson’s treasurer reported it to authorities, who spent years trying to track down millions of dollars Musica had been juggling in as many as 150 bank accounts, according to Kalm. Only $3 million was ever recovered. The event triggered major revisions to the auditing, accounting and regulatory fields.

Like Musica’s fraud, the $50 billion Madoff scandal was reported by one of the employees of Madoff’s investment firm. Madoff was sentenced to 150 years in prison beginning this year. He, too, was accused of falsifying documents to indicate higher returns on investments, and the Madoff scandal is dominating the news in the same way Musica’s scheme did in its day.

On Thursday, U.S. Sen. Christopher Dodd, D-Conn., led the Senate Finance Committee in grilling the SEC over its inability to uncover Madoff’s scheme, which actually took in pension funds from Musica’s old home town of Fairfield. Dodd’s committee is attempting to overhaul the system to make sure this never happens again.

“Bernard Madoff stole $50 billion,” said Dodd. “He stole from individuals and pension funds and charities and municipalities like Fairfield in my home state. He stole more than money. He stole the retirement savings and the economic security of families across the country. And the Securities and Exchange Commission didn’t stop him. … And so today, we hold our third hearing on Ponzi schemes — and our second on the Madoff fraud, in particular –to find out how this could possibly have happened and what we need to do to make sure it can never happen again.”

While the government tries to correct some major flaws in the regulatory system today, Kalm and a sociology professor weighed in why America seems to be plagued by cycles of fraud.

Without excusing Musica’s actions, Kalm said there are clues as to why a brilliant, gregarious man like Musica would decide his best chance at achieving the American dream would be gained through deceit.

Musica’s life lessons

Musica, born in 1884, was the oldest of nine children born and grew up in Brooklyn. Though not rich, Kalm said the Musica family was not as desperately poor as news accounts indicated. The father was a barber and eventually owned a grocery store. The mother was ambitious and pushed the father and children to make something more of their lives and achieve the American dream.

If there’s a turning point in Musica’s story, it might be his first arrest.

In 1909, Philip Musica was arrested for bribing dock officials to change the weight of cheese and other items he was importing for the family store, thus reducing his tariffs and allowing him to offer lower-priced items than his competitors. Musica served time in a reformatory prison, where he was released early after charming the warden and landing a presidential pardon.

“The first scandal, you have to question,” Kalm said. “The cheese scandal was the Customs House scandal and was much larger than Philip. He was one example they picked on. Philip was just trying to play the game at that point.”

But he also learned that he could charm people — that people wanted to believe in him.

Musica left prison and started a new company selling wigs. But that business was also fraudulent and involved securing loans against over-inflated inventory values. One bank uncovered the fraud when it sent agents to the piers to inspect the inventory, Kalm said. Musica was again convicted of a felony.

Kalm said what Musica learned from these arrests was that there are different rules for different people. The same people who admitted taking bribes kept their jobs in the Customs House, while people like Musica went to jail, he said.

After his second conviction, Musica did something extraordinary. He changed his name to William Johnson and landed a job with the New York City district attorney. That also ended in scandal, but Musica ultimately survived to go on to found two hair tonic companies during the 1920s that served the bootlegging industry, according to press accounts from the day. Hair tonic makers were able to use large amounts of alcohol in their products, and bootleggers would buy the tonic and use the alcohol to make their booze.

He moved his operation to Fairfield, and in 1926, he bought McKesson & Robbins.

Kalm said Musica was actually a very good businessman. As the head of McKesson, Kalm said Musica created what amounts to the modern distribution chain by consolidating small mom-and-pop drug stores across the country.

Some people saw Musica as the cancer that had to be removed from McKesson to save the company, Kalm said, but it was Musica who probably made the company worth saving.

Don’t believe the hype

“The biggest comment I hear about Philip was, ‘Oh, what if he had just been good?’” Kalm said.

Musica, like other men of his stripe, was perceived to be better at business than other people. Like some sort of Wall Street superhero, he was a magic money man. Madoff had the same sort of aura. Charles Ponzi, whose $8 million scandal rocked the nation in 1920, had a similar reputation for a short period of time.

“Everybody talks about Charles Ponzi, and to me [Musica] makes Charles Ponzi look like a holdup guy,” Kalm said. “[Musica] was in Connecticut for 20 years of his life, and he fooled everybody — the smartest guys in the room, Wall Street, Fairfield County.”

He said after the fact a lot of people said they knew all the time Musica was a fraud. But that was just people trying to save face.

Or it’s tied to something deeper: that even those with suspicions wanted to believe there was a guy like Musica out there, who figured out how to not lose money, even in bad times.

Attorney Richard Slavin, principal and chair of Cohen and Wolf P.C.’s Securities Group and a former bank regulator, said these scams work because “people want to believe.”

What’s interesting to Slavin is when the scams last as long as Madoff and Musica’s did. But that’s a testament to the brilliance of the people who come up with these schemes.

“I’ve represented guys who committed fraud. I’ve sued guys who perpetrated fraud,” Slavin said. “The mind of the fraudster is unlimited.”

Kurt Schlichting, the Fairfield University E. Gerald Corrigan professor of sociology and anthropology, said these scandals create such a visceral reaction from people because they represent a betrayal of trust.

For example, he said, Madoff used his connections within the Jewish community to bring in investors. Madoff relied on his community connections, which are built on mutual trust.

“When that trust is betrayed, it’s just awful,” Schlichting said.

But the scandals also tear at a bigger idea, the professor said, an idea that’s a core part of the American identity, that we are constantly building a better nation for a larger good.

“We believe in the perfectibility of humanity,” Schlichting said. “We’re constantly disappointed.”

Kalm, for his part, thinks Musica didn’t believe he was the bad guy in the story.

Musica grew up in a section of Brooklyn that produced gangsters and the heads of crime syndicates. “Those kids were all there becoming the ‘godfathers,’ and he was right there next to them. But everything points to him having a different vision of what he should be,” Kalm said. “He’s not a gangster. He aspires to the American Dream, what we all aspire to.”

Musica’s path to that dream led to mansions, wealth and respect for nearly a decade.

“I think he thought what he was doing was best for his family,” Kalm said, then added, “And the stockholders.”

Robert Kalm is looking for anyone with information on F. Donald Coster’s/Philip Musica’s life and history, preferably people who dealt personally with him. He can be contacted at or by visiting

(c) 2009 The Connecticut Post. All rights reserved.

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Extra! Extra! Don’t believe everything you read!

Welcome to Relics, the official blog of the Philip Musica documentary.

Philip Musica was my grandparent’s boss, then their brother-in-law, and finally their fascination. My grandmother dedicated a good part of her precious life to preserving his story. My documentary is a sequel to the work and relics she left behind.

Philip is in the history books as the greatest single American fraud of the Twentieth Century and yet few know his name. Up until the financial collapse in the fall and winter of 2008, there was barely a mention of him on the entire Internet. A Google search for Philip+Musica brought up Philip Glass, the musician.

As The New Yorker, The New York Times and Time Magazine have made their archives searchable, the old articles have surfaced, but the only thing newly published is a Wikipedia entry. It is sadly inaccurate for their standards, and I am not being sarcastic. I believe in the Wikipedia and its worldwide multitude of watchful online editors.

I forgive the Wikipedia’s failure, not because I think they are anything less than exacting, but because their subject in this instance is Philip.

In addition to being a major example of the confidence man, he is also a matchless historical subject. No other figure presents such a challenge. When I think of Philip, I think of that last great line from Christopher McQuarrie and Bryan Singer’s The Usual Suspects.

“And like that… he is gone.”

Philip Musica spent his life, like every ambitious American, making himself more than he already was, except Philip was a pioneer and a genius at it. When he came face to face with obstacles, he transformed. When he came face to face with the law, he became Houdini.

As a media subject in the early second decade of the last century, he was sensationalist fodder for muckrakers. When he was revealed as a better Gatsby than Gatsby at the end of the Great Depression, a man whose entire biography was falsified, the reporters had license to make up anything they wanted about him.

And I am amazed at the license they took. Often I did not need the facts myself to see the bias; I just had two reputable sources conflicting to the point one was blatantly wrong. One, the other, or both, were either printing the hearsay or just outdoing themselves. Who wasn’t telling a tall tale about Philip, including Philip?

Friends and family have asked me for some time why this project is taking so long.

Because I want to get it right.

No one has researched Philip since the Fifties. Whenever an Enron or a Madoff appears, he comes up in minor conversation or an article, but no one has done anything more than review and rehash those yellowing yellow articles in sixty years. The two-issue New Yorker article by Robert Shaplen is the best of the bunch, and even he admits he couldn’t nail things down.

Philip is much more than a character for the true crime section. The truth is far more fascinating, engaging, and significant.

Rarely does a writer go looking for a story and find it sealed in his own house. Rarely does a writer find a story that is a dare to the empirical method. Rarely does a writer find such a story.

Join me. I am on the trail of a puff of smoke.

Robert Kalm teaches writing at Quinnipiac University and is producing a documentary on his grandparent’s brother-in-law, Philip Musica. Visit

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