Thursday, June 5, 2008

Henry Nicholas Drug Indictment

LA Times Article
A federal grand jury has indicted Henry T. Nicholas III on fraud charges, according to documents unsealed today that also accuse the Orange County billionaire of supplying customers with prostitutes and drugs and slipping Ecstacy into the drinks of unwitting technology executives.

In a 21-count indictment, Nicholas and former Broadcom Corp. Chief Financial Officer William J. Ruehle were charged with backdating millions of stock options for five years to improperly reward employees of the Irvine computer chip maker Nicholas co-founded.

A second indictment naming only Nicholas accused him of maintaining homes and commercial properties in Orange County and Las Vegas for the "purpose of using and distributing controlled substances" he sometimes referred to as "party favors."

The article has links to PDF files of the actual indictments. I've only looked at the drug indictment; the backdating stuff is probably not as interesting.

Overt Act No. 17: In early 2000, in New Orleans, Louisiana, defendent NICHOLAS used MDMA (ecstacy) to spike the drink of a technology executive without the executive's knowledge.

Overt Act No. 49: In or around 2001, in the lobby of Broadcom's office in Irvine, California, defendant NICHOLAS directed a Broadcom employee to provide approximately $5,000 to $10,000 in cash to a drug courier in exchange for an envelope containing controlled substances.

Overt Act No. 50: In or around 2001, defendant NICHOLAS distributed and used controlled substances during a flight on a private plane between Orange County, California, and Las Vegas, Nevada, causing marijuana smoke and fumes to enter the cockpit and requiring the pilot flying the plane to put on an oxygen mask.

Overt Act No. 56: On or about June 29, 2002, pursuant to the Settlement Agreement, which contractually prevented the Broadcom employee from speaking about defendant NICHOLAS's unlawful narcotics activities, Broadcom paid $1,000,000 to the Broadcom employee and the employee's attorney.

Wow, Nick was buying drugs in our office lobby. I'm a bit worried about #56 since it appears that Broadcom paid the $1M instead of Nick personally. I wonder who in finance at the time knew about the $1M payoff...

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