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Broadcom official sees 2 indictments

Henry Nicholas III faces 340 years in prison if convicted of backdating fraud and operating multiple drug houses.

June 05, 2008|By Joseph Serna

A Newport Coast man faces up to more than 340 years in prison federal prosecutors said Thursday after two unsealed federal indictments allege he hid billions of dollars’ worth of expenses from Securities and Exchange Commission officials, and stored and distributed ecstasy, cocaine and methamphetamines to escorts.

Henry Nicholas III, 48, a co-founder and former chief executive of the Irvine-based Broadcom company, surrendered to FBI agents Thursday, according to federal prosecutors.

Nicholas and former Broadcom Chief Financial Officer William Ruehle are accused of withholding $2.2 billion worth of stock option reward expenses from SEC officials, according to the indictment.

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The two awarded stock options to employees and falsified SEC documents so the award date would match a date when the stock price was low, prosecutors claim.

The practice ballooned the company’s profit by billions of dollars, prosecutors said.

In a second indictment, Nicholas is also accused of keeping drugs in houses in Laguna Hills and Newport Coast, a warehouse in Laguna Niguel and a condominium in Las Vegas.

Federal investigators claim Nicholas gave ecstasy, cocaine and methamphetamines to escorts he hired.

In one instance outlined in federal documents, Nicholas and others smoked so much marijuana on a private plane from Orange County to Las Vegas that the pilot had to put on an oxygen mask because the smoke entered the cockpit, prosecutors claim.

Calls to one of Nicholas’ attorneys were not immediately returned Thursday.


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