Miniscribe Fraud Explained
Fraud Examination Executive Summary:
Miniscribe
By Samantha Altieri, Zac Biesiada, Dan Cohen, and Tim Foley
BACC 552
Miniscribe was a computer disk drive manufacturing company that was founded in 1981 by Terry Johnson. The company was initially run out of basement of Mr. Johnson’s home in Longmont, Colorado. Shortly after becoming a publicly traded company in 1983, Miniscribe began to experience financial losses. (United States v. Patrick J. Schleibaum) In 1985 the venture capital firm Hambrecht & Quist invested a large sum of money in Miniscribe. Hambrecht & Quist sent Quentin Thomas (Q.T.) Wiles to serve as Miniscribe’s Chief Executive Officer and chairman of the board. Q.T. Wiles was a well-known turnaround specialist who was specifically sent to Miniscribe to help correct their financial position. Wiles was “initially credited with helping to bring about a sales increase from $115 million in 1985 to $603 million in 1988. In the same period, Miniscribe went from a loss of $16.8 million to reported earnings of $25.8 million, and the company’s stock became a Wall Street favorite” (Leovy, 1994). Wiles headed Miniscribe from Sherman Oaks, California; the rest of Miniscribe’s management was headquartered in Longmont, Colorado. Wiles’ management team included: Patrick J. Schleibaum, chief financial officer and later vice president; Gerald Goodman, president, chief operating officer and board member; Jesse C. parker, executive vice president; Owen P. Taranta and Warren Perry, division managers; Kenneth A. Huff and Steven Wolfe, operations controllers; and William P. Lorea, who later replaced Mr. Schleibaum as chief financial officer. (United States v. Patrick J. Schleibaum). With the arrival of Q.T. Wiles as company CEO in 1985, came a considerable shift in the corporate culture of the company. Wiles instituted an intimidating and reckless management structure of “fierce competition.” Management under Wiles was judged by their
Miniscribe
By Samantha Altieri, Zac Biesiada, Dan Cohen, and Tim Foley
BACC 552
Miniscribe was a computer disk drive manufacturing company that was founded in 1981 by Terry Johnson. The company was initially run out of basement of Mr. Johnson’s home in Longmont, Colorado. Shortly after becoming a publicly traded company in 1983, Miniscribe began to experience financial losses. (United States v. Patrick J. Schleibaum) In 1985 the venture capital firm Hambrecht & Quist invested a large sum of money in Miniscribe. Hambrecht & Quist sent Quentin Thomas (Q.T.) Wiles to serve as Miniscribe’s Chief Executive Officer and chairman of the board. Q.T. Wiles was a well-known turnaround specialist who was specifically sent to Miniscribe to help correct their financial position. Wiles was “initially credited with helping to bring about a sales increase from $115 million in 1985 to $603 million in 1988. In the same period, Miniscribe went from a loss of $16.8 million to reported earnings of $25.8 million, and the company’s stock became a Wall Street favorite” (Leovy, 1994). Wiles headed Miniscribe from Sherman Oaks, California; the rest of Miniscribe’s management was headquartered in Longmont, Colorado. Wiles’ management team included: Patrick J. Schleibaum, chief financial officer and later vice president; Gerald Goodman, president, chief operating officer and board member; Jesse C. parker, executive vice president; Owen P. Taranta and Warren Perry, division managers; Kenneth A. Huff and Steven Wolfe, operations controllers; and William P. Lorea, who later replaced Mr. Schleibaum as chief financial officer. (United States v. Patrick J. Schleibaum). With the arrival of Q.T. Wiles as company CEO in 1985, came a considerable shift in the corporate culture of the company. Wiles instituted an intimidating and reckless management structure of “fierce competition.” Management under Wiles was judged by their
Citations: United States v. Patrick J. Schleibaum, 90 U.S. 1430 (1996). Retrieved from http://law.justia.com/cases/federal/appellate-courts/F3/102/1043/637433/. Leovy, J. (1994, July 12). Former turnaround expert goes on trial for fraud. Retrieved from http://articles.latimes.com/1994-07-12/business/fi-14736_1_sherman-oaks. "Maxtor Corporation." Funding Universe. Web. 04 May 2012, <http://www.fundinguniverse.com/companyhistories/Maxtor-Corporation-company-History.html>.