The Tragic End of MiniScribe: The $600M Disk Giant That Shipped Bricks to Fake Its Sales
The Fatal Board
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In 1988, MiniScribe reported $603 million in sales and looked like one of the great turnaround stories in the American computer business. Behind the numbers, executives had broken into their auditors' trunks, booked phantom shipments to warehouses, recycled defective drives from a "dog pile," and, on one Saturday in December 1987, packed 26,000 bricks from the Colorado Brick Company into disk drive boxes that the books treated as roughly $4 million of inventory.
This documentary tells the full rise and fall of MiniScribe, the Longmont, Colorado hard drive maker founded by Terry Johnson that supplied drives for IBM PC XT era machines, Compaq computers and even Apple's Hard Disk 20SC. You'll see how turnaround specialist Q.T. Wiles, known as "Dr. Fix-It," pushed a pressure-cooker culture of dash meetings and impossible sales targets, how a $2 million inventory gap grew into a $15 million hole, and how the cover-up turned into one of the most famous accounting frauds of the 1980s. We follow the story through the 1989 "massive fraud" report, the Chapter 11 bankruptcy, Maxtor's $46 million purchase of the assets, a $550 million Galveston jury verdict, the $95 million Coopers & Lybrand settlement, and the criminal convictions that sent Wiles to federal prison.
If you remember the whine of an MFM hard drive spinning up in a beige PC, or you worked in the disk drive business in the 1980s, this is the story of how a real company that built real drives destroyed itself one quarter at a time.
Sources:
United States v. Wiles and United States v. Schleibaum, U.S. Court of Appeals for the Tenth Circuit (1996): https://caselaw.findlaw.com/court/us-... The Washington Post, "MiniScribe Report Describes 'Massive Fraud'" (September 13, 1989): https://www.washingtonpost.com/archiv... UPI Archives, "Accountants cited in verdict against computer disk driver maker" (February 5, 1992): https://www.upi.com/Archives/1992/02/... UPI Archives, "Judge overturns $550 million MiniScribe verdict" (February 17, 1992): https://www.upi.com/Archives/1992/02/... StorageNewsletter, "History (1989): Unbelievable! Miniscribe Shipped Bricks Rather than HDDs" (October 10, 2019): https://www.storagenewsletter.com/201... Andy Zipser, "Cooking the Books: How Pressure to Raise Sales Led MiniScribe to Falsify Numbers," The Wall Street Journal (September 11, 1989) Andy Zipser, "MiniScribe's Investigators Determine That 'Massive Fraud' Was Perpetrated," The Wall Street Journal (September 12, 1989) Andy Zipser, "MiniScribe Seeks Chapter 11 Protection, Posts $116 Million Loss for Nine Months," The Wall Street Journal (January 3, 1990) Christi Harlan, "Coopers & Lybrand Agrees to Payment of $95 Million in the MiniScribe Case," The Wall Street Journal (October 30, 1992) "Company News; Maxtor Acquires MiniScribe Assets," The New York Times (July 1990)
You can contact me at: thefatalboard@proton.me
This channel is made by an enthusiast who loves business and technology history — nothing more. All videos are for educational and entertainment purposes only and reflect my personal views and interpretations. I research each story carefully using publicly available sources, but errors or omissions can happen. Nothing here is professional, financial, or legal advice, and this channel is not affiliated with, endorsed by, or sponsored by any company mentioned.
10 Comments
So Maxtor promised to cover the costs and took the blame. Kid was pretty scared up to that point.
The Tragic End of MiniScribe: The $600M Disk Giant That Shipped Bricks to Fake Its Sales
The Fatal Board
15,095 views
Subscribe to the channel!
@fatalboard
Affiliate Disclosure: Some of the links below are affiliate links. If you purchase through them, you support the channel at no additional cost to you.
Resources & Links
MiniScribe 3425 20MB Hard Drive 🔍 eBay (Best Deals): https://www.ebay.com/sch/i.html?_nkw=...
Seagate ST-225 20MB Hard Drive 🛒 Amazon US: https://www.amazon.com/s?k=Seagate+ST...
5.25 Inch Floppy Disks 🛒 Amazon US: https://www.amazon.com/s?k=5.25+inch+...
Apple Hard Disk 20SC 🔍 eBay (Best Deals): https://www.ebay.com/sch/i.html?_nkw=...
Seagate Portable External Hard Drive 🛒 Amazon US: https://www.amazon.com/s?k=Seagate+Po...
Fraud Examination by W. Steve Albrecht 🛒 Amazon US: https://www.amazon.com/s?k=Fraud+Exam...
In 1988, MiniScribe reported $603 million in sales and looked like one of the great turnaround stories in the American computer business. Behind the numbers, executives had broken into their auditors' trunks, booked phantom shipments to warehouses, recycled defective drives from a "dog pile," and, on one Saturday in December 1987, packed 26,000 bricks from the Colorado Brick Company into disk drive boxes that the books treated as roughly $4 million of inventory.
This documentary tells the full rise and fall of MiniScribe, the Longmont, Colorado hard drive maker founded by Terry Johnson that supplied drives for IBM PC XT era machines, Compaq computers and even Apple's Hard Disk 20SC. You'll see how turnaround specialist Q.T. Wiles, known as "Dr. Fix-It," pushed a pressure-cooker culture of dash meetings and impossible sales targets, how a $2 million inventory gap grew into a $15 million hole, and how the cover-up turned into one of the most famous accounting frauds of the 1980s. We follow the story through the 1989 "massive fraud" report, the Chapter 11 bankruptcy, Maxtor's $46 million purchase of the assets, a $550 million Galveston jury verdict, the $95 million Coopers & Lybrand settlement, and the criminal convictions that sent Wiles to federal prison.
If you remember the whine of an MFM hard drive spinning up in a beige PC, or you worked in the disk drive business in the 1980s, this is the story of how a real company that built real drives destroyed itself one quarter at a time.
Sources:
United States v. Wiles and United States v. Schleibaum, U.S. Court of Appeals for the Tenth Circuit (1996): https://caselaw.findlaw.com/court/us-... The Washington Post, "MiniScribe Report Describes 'Massive Fraud'" (September 13, 1989): https://www.washingtonpost.com/archiv... UPI Archives, "Accountants cited in verdict against computer disk driver maker" (February 5, 1992): https://www.upi.com/Archives/1992/02/... UPI Archives, "Judge overturns $550 million MiniScribe verdict" (February 17, 1992): https://www.upi.com/Archives/1992/02/... StorageNewsletter, "History (1989): Unbelievable! Miniscribe Shipped Bricks Rather than HDDs" (October 10, 2019): https://www.storagenewsletter.com/201... Andy Zipser, "Cooking the Books: How Pressure to Raise Sales Led MiniScribe to Falsify Numbers," The Wall Street Journal (September 11, 1989) Andy Zipser, "MiniScribe's Investigators Determine That 'Massive Fraud' Was Perpetrated," The Wall Street Journal (September 12, 1989) Andy Zipser, "MiniScribe Seeks Chapter 11 Protection, Posts $116 Million Loss for Nine Months," The Wall Street Journal (January 3, 1990) Christi Harlan, "Coopers & Lybrand Agrees to Payment of $95 Million in the MiniScribe Case," The Wall Street Journal (October 30, 1992) "Company News; Maxtor Acquires MiniScribe Assets," The New York Times (July 1990)
You can contact me at: thefatalboard@proton.me
This channel is made by an enthusiast who loves business and technology history — nothing more. All videos are for educational and entertainment purposes only and reflect my personal views and interpretations. I research each story carefully using publicly available sources, but errors or omissions can happen. Nothing here is professional, financial, or legal advice, and this channel is not affiliated with, endorsed by, or sponsored by any company mentioned.
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