Scrap equipment and fraud (was Re: Digital archaeology of the microcomputer, 1974-1994)

Ethan Dicks ethan.dicks at
Fri Jan 19 00:15:54 CST 2007

On 1/18/07, Billy Pettit <Billy.Pettit at> wrote:
> Ethan Dicks wrote:
> It's not just manufacturers (who are trying to comply with various
> regulations on scrapping equipment and taxes)... When I was at Lucent
> in Columbus, they started drilling through the HDAs of discarded
> drives, not to protect against data theft from a working drive, but
> against employee harvesting of the scrap bins.
> There is another reason for this.  Warranty fraud has become a 7 digit
> problem for most OEM manufacturers.  Get a good stock of scrap products,
> take parts off a good product, replace them with the bad parts and send the
> good product in for repair....

I did not witness this, but I heard at a DECUS that some time in the
late 1980s, DEC had a different kind of scrap problem - they would
scrap numerous things at the factory, load them into bins and sell
them to gold scrappers.  The problem came with a gold scrapper started
selling bits and pieces (like MicroVAX CPU and memory boards) to other
parties which would end up in the 3rd-party resale stream and end up
in customers' hands.  The damage was two-fold... 1) reputation, and 2)
the IRS discovering that "scrapped" items were being bought and sold.

The solution, I heard, was to get a chipper that could reduce boards,
racks, etc., into postage-stamp-sized chunks before handing the waste
over to the salvage companies.  I understand that the first guys to
get a bin of metal and PCB chips rather than boards and boxes they
could cherry pick, were a bit surprised.

OTOH, one of my co-workers from Software Results took a pile of boards
from the scrap bin and drilled and mounted them to make a 1.5m-tall
PCB Xmas tree (the solder mask was green).  The bean counters were
initially upset until the drilled holes were pointed out to them -
clearly the boards had been damaged sufficiently that nobody was going
to be mistaking them for usable product.


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