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Billionaire Broadcom Co-founder Indicted for Drugs & Backdating

Busted for Backdating-Related Securities and Wire Fraud, False Certification of Financial Reports and Filing False Statements

Broadcom’s six-foot six-inch co-founder and ex-CEO Henry Nicholas, 48, whose last reported whereabouts was in rehab for alcoholism, was busted Thursday after two grand jury indictments were unsealed. One accuses him of a raft of titillating drug charges; the other of backdating-related securities and wire fraud, false certification of financial reports, filing false statements with the SEC and conspiracy.

The drug indictment, dated last October, charges Nicholas with conspiracy to distribute and possession with the intent to distribute ecstasy, cocaine, methamphetamines, vicoprofen and diazepam. It says he maintained two houses, a playroom-style warehouse and a condo for distributing and using controlled substances between January 1999 and December 2005.

The charges say he “spiked the drinks of others with MDMA (ecstasy) without their knowledge, including, without limitation, the drinks of technology executive and representatives who worked for Broadcom’s customers” and that he “hired prostitutes and escorts for himself and customers, representatives and associates of Broadcom and other business entities with which he was affiliated and supplied such prostitutes and escorts with controlled substances.”

It also says he “used threats of physical violence and death and payments of money to attempt to conceal his unlawful conduct.” The alleged payoff was for a million bucks.

Apparently he left a trail of invoices for the drugs with the memos reading “supplies,” “party favors,” “refreshments” and “E” and paid cash to drug couriers who dropped packages off at Broadcom.

The indictment reads like a Dragnet-style PI’s report of dates and places and says at one point that the marijuana smoke on a private plane flight in 2001 was so dense the pilot had to put on an oxygen mask.

Nicholas resigned as CEO of Broadcom in 2003.

In April the company agreed to pay $12 million to settle charges related to its restatement of earnings to reflect $12 billion in unreported compensation.

Broadcom’s other co-founder Henry Samueli stepped down as chairman last month because of civil charges and its general counsel David Duff and former CFO William Ruehle are also up to their neck in trouble.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025.

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