"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 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.
However, MiniScribe embarked upon a round of layoffs 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...."
However, I would like to point out that VCs are very important. Without them there will be no SV as we know (I do see how VC landscape is getting disrupted by YCombinator, Start Fund and similar).
And - it is not nice to call people dumb if they are not dumb (at least I wish I'm dumb as the dumbest VC I met).