Indictment: Broadcom ex-CEO built drug warehouse

Indictment: Broadcom ex-CEO built drug warehouse

By GILLIAN FLACCUS
The Associated Press
Friday, June 6, 2008; 6:59 AM

SANTA ANA, Calif. -- 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.

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.

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.

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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.

more:http://www.washingtonpost.com/wp-dyn/content/article/2008/06/06/AR2008060600491.html?hpid=moreheadlines