Skeletons in the closet - Mercedes-Benz Forum

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post #1 of 4 (permalink) Old 06-05-2008, 01:57 PM Thread Starter
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Skeletons in the closet

Surprising nonetheless given the squeaky clean images of tech execs
but given he's from South Cal, I guess it's not as much

Broadcom co-founder faces drug, securities charges
By GILLIAN FLACCUS 06.05.08, 3:24 PM ET

SANTA ANA, Calif. -

Broadcom Corp. co-founder Henry T. Nicholas III was indicted Thursday on fraud, conspiracy and drug charges - including allegations he spiked the drinks of technology executives and customer representatives with ecstasy and maintained a warehouse for ecstasy, cocaine and methamphetamine.

The charges were contained in two indictments unsealed by federal authorities.

One details the drug accusations and the other charges Nicholas with violations related to improperly accounting for backdating stock options while he led the computer and cell phone chip maker.

That indictment also names Broadcom (nasdaq: BRCM - news - people )'s former chief financial officer, William J. Ruehle, who faces conspiracy, securities fraud and other charges. He is not charged with drug violations.

Thom Mrozek, spokesman for the U.S. Attorney's office, said Nicholas was in custody after turning himself in to FBI agents in Santa Ana.

Nicholas and Ruehle were scheduled to appear in court later Thursday.

Nicholas faces a total of 21 counts on both indictments. The drug indictment charges Nicholas with conspiracy to distribute and acquire controlled substances but provides few details.

His attorney, Brendan V. Sullivan Jr., declined to comment. Last month, attorney Bill Hake said Nicholas had entered an alcohol rehabilitation program.

Ruehle faces 21 counts on the stock options indictment, including allegations of false certification of financial reports, filing false statements with the U.S. Securities and Exchange Commission and wire fraud.

The name of Ruehle's attorney could not be immediately determined.

Last month, securities regulators charged Ruehle, Nicholas, Broadcom co-founder Henry Samueli and Broadcom general counsel David Dull in a civil suit with falsifying the company's reported income, leading to what is believed to be the largest-ever accounting restatement related to backdating stock options.

The SEC said Broadcom had to restate its financial results in January 2007 because of the scheme and reported more than $2 billion in compensation expenses it hadn't accounted for.

Nicholas, 48, served as CEO and president from Broadcom's inception until he resigned in 2003. Ruehle, 65, joined the company in 1997 as vice president and chief financial officer and retired in 2006.

Samueli stepped down as chairman of the company's board of directors and planned to take a leave of absence as chief technology officer, according to a May statement from the Irvine-based company.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed
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post #2 of 4 (permalink) Old 06-05-2008, 02:00 PM
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Why would he spike their drinks with xtasy?
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post #3 of 4 (permalink) Old 06-05-2008, 11:05 PM Thread Starter
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In his early days running Broadcom at the height of the dot-com boom in the mid-1990s, Mr. Nicholas was nicknamed Darth Vader by rivals because he was so competitive. He was known for his outlandish stunts and spectacular outbursts.

In one incident described in the indictment, Mr. Nicholas and his guests are said to have inhaled so much marijuana on a flight to Las Vegas from Orange County, Calif., that clouds of smoke and fumes drifted into the cockpit of the private plane and the pilot was required to put on an oxygen mask.

Mr. Nicholas is also accused of hiring prostitutes not only for himself but also for customers and associates of Broadcom, and to have supplied them with drugs. And, according to the indictment, Mr. Nicholas “used threats of violence and death and payments of money to attempt to conceal his unlawful conduct.”

In one 2002 incident cited in the indictment, Mr. Nicholas is described as entering into a $1 million settlement agreement “with a Broadcom employee who had knowledge” of his boss’s drug activities.

Mr. Nicholas used several residences in Orange County and Las Vegas, as well as a commercial office space called the “warehouse,” to distribute and use drugs, according to the unsealed indictments. Various code words, including “supplies,” “party favors” and “refreshments,” were used to describe the various drugs, the indictment said. But ecstasy is described as a particular favorite. According to the indictment, Mr. Nicholas gave some to an executive without his knowledge in July 1999 at the Woodstock concert in Rome, N.Y.
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post #4 of 4 (permalink) Old 06-05-2008, 11:31 PM
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So whats the problem, just another biznezz mann...............
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