Miniscribe shipped masonry bricks in place of hard drives?!?

[Brendan]

I heard on Marketplace (economic news radio program) on Thursday evening (1/14/2010) that Miniscribe had done some crazy things in the late 80s such as pack up bricks with the approximate weight of hard drives and used them to help "cook" the financial books. I found the story really off-the-wall and did some searching for 'Miniscribe bricks' and sure enough, found a number of sites describing the incident. Being in middle school at the time and not really following the news then, I wasn't sure if this was well publicized, so I thought I'd share.

In mid-December 1987, Miniscribe's management, with Wiles' approval and Schleibaum's assistance, engaged in an extensive cover-up which included recording the shipment of bricks as in-transit inventory. To implement the plan, Miniscribe employees first rented an empty warehouse in Boulder, Colorado, and procured ten, forty-eight foot exclusive-use trailers. They then purchased 26,000 bricks from the Colorado Brick Company.

On Saturday, December 18, 1987, Schleibaum, Taranta, Huff, Lorea and others gathered at the warehouse. Wiles did not attend. From early morning to late afternoon, those present loaded the bricks onto pallets, shrink wrapped the pallets, and boxed them.

The weight of each brick pallet approximated the weight of a pallet of disk drives. The brick pallets then were loaded onto the trailers and taken to a farm in Larimer County, Colorado.

Miniscribe's books, however, showed the bricks as in-transit inventory worth approximately $4,000,000. Employees at two of Miniscribe's buyers, CompuAdd and CalAbco, had agreed to refuse fictitious inventory shipments from Miniscribe totalling $4,000,000. Miniscribe then reversed the purported sales and added the fictitious inventory shipments into the company's inventory records.

 

[Chuck(G)]

It was--and the subject of several jokes.

You have to understand the times. Black Monday left a lot of companies reeling. Survival to a lot meant finding a buyer--and that sometimes meant that revenue figures were, shall we say, "optimistic". And the financial market was running riot with LBOs and arbitrage from the likes of people like this:

I still have a Maxtor-labeled 5.25" Miniscribe ESDI drive on my shelf somewhere. In their heyday, Miniscribe drives were pretty solid performers.

At least since the end of WWII, the tech industry has been a series of bubbles. The road that leads from then to now is strewn with the corpses of failed ventures.

 

[saundby]

Yes, it's true. I have a business associate who was there at the time. They were hoping to keep things afloat till they could get something real and profitable out the door. If things had worked out, I suppose the story would be seen like the Fedex blackjack story. There was no intention to defraud customers, just make things look better on paper to investors than they really were until they could get a competitive product out the door. But it didn't work, and the company collapsed. It was a surprise (the bricks, not so much that there were problems) and very heart-rending for most of the people there then, the people there were like family.

 

[Chuck(G)]

There was no intention to defraud customers, just make things look better on paper to investors than they really were until they could get a competitive product out the door.

As they learned, it's far safer to defraud customers than to defraud investors.

 

[saundby]

It was certainly foolish all around.

I wonder how much a NIB Miniscribe brick would go for on auction today? :D

 

[digger]

Did Miniscribe also sell MFM drives as RLL drives?

Did Miniscribe also sell MFM drives as RLL drives?

I wonder...

Did Miscribe's "cost-cutting measures" sometimes also include the selling of MFM drives with RLL controllers?

We bought a Miniscribe hard drive at a computer fair back in the day, and the price was surprisingly low for a 40MB disk...

It was supposedly an RLL drive, but after each low level format, the drive would gradually become noisier and slower over time, and at certain points the heads could actually be heard repeatedly bumping into something (I remember those hard ticking sounds coming from the hard drive really freaking me out). Eventually the disk would crash, losing all its information. After a low level format, the drive would run fine again for some time and start out silently again, after which the cycle would repeat itself.

Someone else on this forum noted that this is a typical issue with MFM drives connected to and formatted by an RLL controller. As far as I understand, the problem is with the lower density drive having more and more difficulties coping with the more sophisticated encoding as it gets fuller and thus denser with data.

I still wonder if this "swindle of the spindle" (yeah, I just came up with that one myself, what do you think? ) was Miniscribe's doing or if someone else further down the supply chain was responsible for this. I initially supposed it was the latter, but this thread made me wonder.

Any thoughts?

 

[rmay635703]

My Unisys 286 came with a miniscribe brick inside it, could never get that drive to work with anything.