MiniScribe generated $3.66 million of false inventory values by packaging bricks and shipping them in 1987 to distributors as disk drives, posting $4.3 million in sales. When the shipments were returned, it increased its inventory by the purported cost of the items shipped, or $3.66 million
Obsolete parts were shipped to Singapore and Hong Kong and, with scrap and other parts at those locations, were repackaged or relabeled as active parts and then included in the 1987 inventory at a value of $8.9 million.