MiniScribe was a manufacturer of disk storage

Disk storage

Disk storage or disc storage is a general category of storage mechanisms, in which data are digitally recorded by various electronic, magnetic, optical, or mechanical methods on a surface layer deposited of one or more planar, round and rotating disks...

 products, founded in Longmont, Colorado

Longmont, Colorado

Longmont is a Home Rule Municipality in Boulder and Weld counties in the U.S. state of Colorado. Longmont is located in Northern Colorado. Longmont is the 13th most populous city in the State of Colorado. The word "Longmont" comes from Longs Peak, a prominent mountain named for explorer Stephen H....

 in 1980. MiniScribe designed and sold stepper motor

Stepper motor

A stepper motor is a brushless, electric motor that can divide a full rotation into a large number of steps. The motor's position can be controlled precisely without any feedback mechanism , as long as the motor is carefully sized to the application...

-based hard disk drives with a large amount of onboard intelligence for the time. They eventually moved into higher-profile voice coil

Voice coil

A voice coil is the coil of wire attached to the apex of a loudspeaker cone. It provides the motive force to the cone by the reaction of a magnetic field to the current passing through it...

 motor designs, at which time, Terry G. Johnson retired and sold the company. The company then went bankrupt in 1990, and their assets, sans liabilities, were subsequently purchased by Maxtor

Maxtor

Maxtor Corporation, founded in 1982 and acquired by Seagate Technology in 2006, was an American manufacturer of computer hard disk drives, the third largest in the world immediately prior to acquisition...

 of San Jose, California

San Jose, California

San Jose is the third-largest city in California, the tenth-largest in the U.S., and the county seat of Santa Clara County which is located at the southern end of San Francisco Bay...

. MiniScribe’s failure centered on one of the first major accounting scandals

Accounting scandals

Accounting scandals, or corporate accounting scandals, are political and business scandals which arise with the disclosure of misdeeds by trusted executives of large public corporations...

 in the computer industry; after losing a supply contract with IBM

IBM

International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...

's PC division in 1985, MiniScribe falsified its sales records for several years before being discovered in 1989.

The primary scandal erupted in the final weeks of 1989, when after failing to procure short-term financing, the company executives decided to embark upon a fraudulent course of action to bring in the financing unwittingly from their customers. As each unit sold was tracked via serial numbers and also sat uninspected for some weeks inside warehouses in Singapore

Singapore

Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...

 awaiting use in production, the decision was made to ship pieces of masonry inside the boxes that would normally contain hard drives. After receiving payment, MiniScribe then planned to issue a recall of all the affected serial numbers and then ship actual hard drive units as replacements, using the money received to meet financial obligations in the short term.

Astoundingly, MiniScribe embarked upon a round of layoff

Layoff

Layoff , also called redundancy in the UK, is the temporary suspension or permanent termination of employment of an employee or a group of employees for business reasons, such as when certain positions are no longer necessary or when a business slow-down occurs...

s just before their Christmas shutdown, including several of the employees that were involved in the packaging and shipping of the masonry. These people immediately called the Denver area newspapers, which broke the story during the holiday season. Following immediate investigations in Singapore and in Colorado the fraud was confirmed. MiniScribe lawyers filed for bankruptcy within minutes of the start of business on January 2, 1990.

Founder Terry Johnson died piloting his small plane near Norman Wells, NT, Canada July 24, 2010