Jewish Billionaire CEO Faces Charges

[Ognir]

Jun 06, 2008 - 08:44:54 PDT
Broadcom Ex-CEO Faces Bizarre Charges - AOL Money & Finance
Jewish Billionaire CEO Faces Charges Of Stock-Options Backdating, Drugging His Business Cohorts, Hiring Prostitutes, Maintaining A Cocaine, Methamphetamine And Ecstasy Warehouse, and Building A Orgy Den Under His House.

http://www.pagecache.info/
http://www.pagecache.info/pagecache/page18102/

Posted: 2008-06-06 09:09:56
Filed Under: Tech News
SANTA ANA, Calif. (June 6) - Federal prosecutors may have charged Broadcom co-founder Henry T. Nicholas III in one of the largest stock-option backdating cases in U.S. history, but it was allegations that the billionaire drugged his business cohorts, hired prostitutes and maintained a drug warehouse that grabbed headlines.

Escorts, Ecstasy and Death Threats: Excerpts From the Indictment


A pair of indictments unsealed Thursday charge the 48-year-old with conspiracy and securities fraud in an alleged scheme to backdate stock options that ultimately forced Broadcom to write down $2.2 billion in profits last year. But prosecutors also detailed a litany of drug charges that apparently came as a surprise to Nicholas and his attorneys.

Henry T. Nicholas III
AP

Henry Nicholas
The charges threaten to ground a high-flying lifestyle that prosecutors say featured the former CEO jetting around the world in his two private planes, building a secret lair under his house and hiring strippers to party at a private warehouse stocked with cocaine, methamphetamine and ecstasy.

Defense attorney Gregory Craig said that Nicholas was innocent and would prevail.

"It's a kitchen-sink attack on Dr. Nicholas. They're trying to throw everything at him from eight years ago," Craig said.

At a court hearing, U.S. Magistrate Arthur Nakazato set Nicholas' bail at $3.3 million. He also ordered random weapons searches and drug tests by the government, home detention, electronic monitoring and the disabling of Nicholas' two private planes. Nicholas, in handcuffs and wearing gray slacks and a white shirt with no tie or belt, nodded vigorously when asked if he agreed to the conditions of release.

Nakazato said he was concerned that Nicholas' extreme wealth could allow him to flee at any moment. He indicated that Nicholas' current Newport Coast home, valued at $15 million to $18 million, would be no impediment to flight for "one of the wealthiest men in the world." Nakazato also said he was bothered by government allegations that Nicholas had threatened and hit a grand jury witness last year during an argument on a private jet.

"If you flee, I will detain you and I will order an arrest warrant and I'll have the marshals and the FBI going on a hunt for you," Nakazato said. "And when they bring you back, I'm not going to show much mercy."

An arraignment hearing was set for June 16. Nicholas did not enter a plea.

Also indicted on the stock-option backdating was Broadcom's former chief financial officer, William J. Ruehle. He was not charged with the drug violations.

Ruehle, 66, was released on $2.6 million bail and surrendered his passport, although he will be allowed to take three international trips that were already planned. He will also be arraigned on June 16.

Ruehle's attorney, Richard Marmaro, said in a statement, "Bill Ruehle is innocent of the charges in the indictment, and he looks forward to the opportunity to clear his good name in a court of law."

Nicholas, who has a Ph.D. in electrical engineering, co-founded Broadcom Corp. in 1991 with Henry Samueli. The company, which makes microchips for cell phones and broadband Internet devices, reported a strong first-quarter profit in April and forecast second-quarter sales of $1.08 billion to $1.13 billion, ahead of Wall Street expectations.

The 18-page indictment on drug charges alleges that Nicholas kept four properties in Orange County and Las Vegas, including a warehouse in Laguna Niguel, Calif., where he stashed and distributed cocaine, methamphetamine and ecstasy.

He later remodeled the warehouse with private rooms and furnished it with art and high-end electronics.

The court documents also claim Nicholas hired prostitutes and escorts for himself, his employees and customers and conspired to get illegal prescriptions for drugs such as Valium.

In 2001, Nicholas smoked so much marijuana during a flight on a private jet between Orange County and Las Vegas that the pilot had to put on an oxygen mask, the indictment states.

At a July 1999 Woodstock concert in Rome, N.Y., Nicholas gave a technology executive ecstasy without the executive's knowledge, the indictment states. Nicholas also allegedly spiked a technology executive's drink with ecstacy in New Orleans in early 2000.

Nicholas required his unnamed co-conspirators to provide detailed invoices for drugs they sold to him, and used code names such as "party favors" and "refreshments" to conceal what was being sold, prosecutors claimed.

The allegations recall two earlier civil lawsuits filed against Nicholas that accused him of rampant drug use and hiring prostitutes. One lawsuit was cited by prosecutors in a motion filed Thursday that sought to deny bail for Nicholas.

That suit was filed by Nicholas' former bodyguard and personal assistant, Kenji Kato. A second lawsuit was filed last year by a construction crew that claimed they were hired to build an underground lair for Nicholas where he could indulge in sex with prostitutes and drug use.

The workers claimed Nicholas failed to pay them millions of dollars and used intimidation and death threats to prevent them from leaving the project, which was kept secret from Nicholas' wife and city inspectors.

Nicholas faces a total of 21 counts in both indictments. The drug charges carry a maximum combined sentence of 20 years in prison. He could face up to 340 years in prison on the stock backdating charges.

Ruehle faces 21 counts in the stock options indictment, which accuses him of filing false statements with the U.S. Securities and Exchange Commission, falsely certified financial reports and committed wire fraud. Ruehle could face up to 370 years if convicted of all counts.

Backdating stock options, which often are granted as hiring and retention incentives, is legal. Companies across the company have run into trouble when they failed to account for the true cost that the backdating created because omitting that cost sometimes inflated the companies' income.

Last month, securities regulators cited Nicholas, Samueli and Ruehle in a civil suit alleging they falsified the company's reported income. The SEC also cited Broadcom general counsel David Dull, but Dull and Samueli were not named in Thursday's criminal indictments.

Nicholas served as CEO and president from Broadcom's inception until he resigned in 2003. At the time, he said he stepped down to try to repair his relationship with his wife.

Nicholas' attorneys said in court Thursday that he has been at a $66,000-a-month Malibu drug rehabilitation center since April.

Ruehle joined the company in 1997 as vice president and chief financial officer and retired in 2006.

Samueli, Nicholas' one-time doctoral adviser, stepped down as chairman of the company's board of directors after the SEC action last month.

Shares rose 65 cents, or 2.3 percent, to $28.75 on Thursday, amid a general upswing in the stock market. Its 52-week trading range was between $16.38 and $43.07.

[sullivan]

Jewish Billionaire CEO Faces Charges Of Stock-Options Backdating, Drugging His Business Cohorts, Hiring Prostitutes, Maintaining A Cocaine, Methamphetamine And Ecstasy Warehouse, and Building A Orgy Den Under His House.

That's another one-way ticket to Tel-Aviv sold, from the sounds of it. If he is guilty as charged, they should lock him away, throw away the key AND make sure that his family don't in any way derive benefit from his crimes. Chances are, he will escape to the gangster's paradise.

[CrackSmokeRepublican]

January 29, 2010 1:03 PM PST
Lurid charges dropped in Broadcom founder case
by Brooke Crothers


Salacious charges in a federal case against Henry T. Nicholas III, co-founder and former CEO of chip giant Broadcom, have been dropped, bringing the scandal-packed case to a close.

Broadcom co-founder and former CEO Henry T. Nicholas III
(Credit: Broadcom)

On Thursday, a judge threw out the remaining charges against Nicholas, granting a request by the prosecutor to dismiss drug-trafficking counts, according to a report in the Los Angeles Times. This comes after the judge dismissed criminal charges connected to stock-option backdating against Nicholas and co-founder Henry Samueli.

Nicholas was indicted in 2008 on charges that he had provided cocaine and Ecstasy to friends and business associates. One of the more striking drug-related allegations centered on a flight to Las Vegas in which Nicholas' pilot allegedly had to resort to using an oxygen mask because marijuana smoke was clouding the cockpit, according to the Times report.

And in 2007 court documents made claims about a "secret and convenient lair" at Nicholas' Laguna Hills home in suburban Los Angeles with secret entries to indulge his "manic obsession with prostitutes" and "addiction to cocaine and Ecstasy."

The judge Thursday ruled that the government hadn't proved its case and also found that prosecutors had engaged in misconduct.

Broadcom was founded in 1991 by Nicholas and Samueli. The two first met in 1981 while working for defense contractor TRW, according to a history on Broadcom's Web site. Samueli specialized in communications systems design and Nicholas in chip design. Both were working on the Defense Department's Very High-Speed IC (VHSIC) program.

In 1988, when Samueli was teaching at UCLA's School of Engineering, he convinced Nicholas, his first Ph.D. candidate, to join him full-time at PairGain Technologies. In 1991, they formed Broadcom based on "their shared visions of cable and high-speed networking," according to Broadcom's Web site.
Brooke Crothers has served as an editor at large at CNET News, an editor at Dow Jones' Asian Wall Street Journal Weekly, and a senior editor at InfoWorld. His CNET blog covers chip technology and computer systems, and how they define the computing experience. He also contributes to The New York Times' Bits and Technology sections. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. Follow Brooke on Twitter @mbrookec.

http://news.cnet.com/8301-13924_3-10444372-64.html


----------
Dr. Henry T. Nicholas, III Joins Dedication of "Gordon's House" at Habitat for Humanity Ceremony

WESTMINSTER, Calif. - (Business Wire) An Orange County family received keys today to their brand new home built through a partnership between the Henry T. Nicholas, III Foundation, the Episcopal Diocese of Los Angeles and Habitat for Humanity of Orange County in honor of the late Episcopal priest Reverend Canon Gordon B. Yeaton, Jr.

Dr. Henry T. Nicholas, with Episcopal Diocese Bishop J. Jon Bruno, helped present the keys and the mortgage contract to the Martinez-Moran family. Since 2007, the Henry T. Nicholas, III Foundation has granted $600,000 to Habitat for Humanity, including $100,000 for the construction of Gordon's House to honor Rev. Yeaton, board member of Habitat for Humanity of Orange County who died in 2007.

Dr. Nicholas attended the event to praise the Diocese and Habitat for their contribution to families and to honor the Martinez-Moran family for their ability to overcome hardships.

"By contributing to this important and gratifying partnership, we are bestowing not only homes, but hope in the lives of people who have overcome adversity," said Dr. Nicholas, the Broadcom Corporation co-founder who established the foundation in 2006. "This project aligns with our Foundation's goals of improving communities and individual lives and I want to thank the Episcopal Church and Habitat for Humanity of Orange County for allowing us to be a part of it."

Dr. Nicholas has been actively involved with the construction of Gordon's House since its inception. In July 2009, Dr. Nicholas presented a $100,000 check to Habitat during a wall-raising ceremony at the Anaheim Convention Center, where the General Convention of the Episcopal Church was being held. Two walls of the home were framed out as part of the ceremony, which were later moved to the current Westminster site.

In addition to Gordon's House in Westminster, funds from the Henry T. Nicholas, III Foundation are helping build 27 homes in San Juan Capistrano, CA as part of the Habitat for Heroes and Foundations for Families neighborhood to benefit disabled veterans and surviving families of military members who have given their lives in service.

"We are grateful for the generous support of the Henry T. Nicholas, III Foundation," said Sharon Ellis, Executive Director of Habitat for Humanity of Orange County. "Their financial contributions and many hours of volunteer service made it possible for the Diaz and Martinez-Moran families to purchase these homes so they could move forward to improve their lives and their lives of their children."

About the Henry T. Nicholas, III Foundation

The Henry T. Nicholas, III Foundation was established in 2006 with the goal of improving communities and individual lives through investment in Education, Youth Sports, Technology, Science, Medical Research, Victim's Rights and National Defense. The Foundation was created by Dr. Henry T. Nicholas, III, co-founder of Irvine, Calif.-based Broadcom Corporation. For more information on the Foundation visit http://www.htnfoundation.org/

About Habitat for Humanity of Orange County

Habitat for Humanity of Orange County, headquartered in Santa Ana, is dedicated to ending substandard housing and building strong communities in Orange County. Habitat uses non-government donations of funding, materials, professional services and volunteer labor to build simple, decent homes which are sold to qualified low income families for a 1% down payment, closing costs, and a long-term mortgage.

About the Episcopal Diocese of Los Angeles and Congregations in Orange County

The Episcopal Diocese of Los Angeles unites some 70,000 Episcopalians in 147 neighborhood congregations, some 40 schools and 20 other specialized service institutions located in six Southern California counties. With 22 congregations in Orange County, the Diocese is historically one of the five most populous and culturally diverse of the Episcopal Church's 110 dioceses located in 16 nations and territories.

For the Henry T. Nicholas, III Foundation
Erika Torres, 714-552-5144ote]

http://www.earthtimes.org/articles/show ... -iii.shtml