Feeds

Drugs, hookers and cranked customers: Ex-Broadcom boss indicted

Private jet hot-boxing and other CEO of the century antics

Combat fraud and increase customer satisfaction

More proof arrives today that we should have befriended the folks at Broadcom in the early part of this decade.

Broadcom co-founder and former CEO Henry Nicholas has been indicted on charges unsealed today of illegal stock-option backdating, which resulted in the largest financial restatement (a write down of $2.2bn in profits) related to the crime in US history — and that's the boring part.

A second indictment unsealed this morning charges Nicholas with maintaining and distributing drugs from his various homes, supplying hired prostitutes with controlled substances, spiking customer and employee drinks with ecstasy, and other surprising drug-related charges.

One incident alleges Nicholas and others smoked so much marijuana during a flight on his private plane between Orange County and Las Vegas that the pilot had to put on an oxygen mask.

Meanwhile Michael Dell's team serves us some lousy roast beef sandwiches at press events.

According to the indictment, over a nine-year period, Nicholas used his home in Laguna Hills and Newport Coast, a warehouse in Laguna Niguel, and a condominium in Las Vegas to distribute ecstasy, cocaine and methamphetamine.

Nicholas is also accused of using ecstasy to spike the drinks of industry executives and employees of Broadcom customers. (Although how giving someone a psychoactive drug without them noticing is beyond us — much less how it aides in making a semiconductor sale when a person has a sudden uncontrollable fascination with their zipper.)

We've seen similar allegations in a lawsuit filed last year by former aide Kenji Kato. Evidently the US government has decided there's some substance to his claims.

The federal narcotics charges carry a statutory maximum penalty of 20 years in federal prison.

Nicholas along with former Broadcom CFO William Ruehle have been named in the indictment about the stock-option backdating scheme. Ruehle has not been accused of involvement the drug-related charges.

Los Angeles Assistant Director in Charge of the FBI, Salvador Hernandez stated: "The defendants are accused of deliberately manipulating their company's public filings, and by their failure to remain accountable, contributing to a degree of mistrust in the marketplace."

Both are expected to appear before a US Magistrate judge this afternoon. Nicholas surrendered himself to the FBI this morning, according to the US Attorney's Office. ®

Update

We've obtained a copy of the drugs indictment, and have it available here (PDF warning).

Among the more interesting claims in the indictment are allegations that Nicholas bought a commercial warehouse in Laguna Niguel, California as a party-going hideaway. The filing says Nicholas built and furnished private rooms in the warehouse with art, furniture and electronics, and instructed co-conspirators to maintain a supply of cocaine, ecstasy and meth on the premise.

The filing lists repeated invoices for bulk purchases of drugs, including a January 2001 "ballpark budget" for 225 tablets of ecstasy for a Superbowl party at the warehouse. Usually the invoices (Really? Drug invoices?) used code-words such as "supplies," and "party favors." However, one time an apparently sloppy alleged co-conspirator wrote an invoice for 50 tablets of ecstasy described as "E," which was quickly reworked to say "refreshments."

The indictment also claims Nicholas constructed an underground room and tunnel beneath his Rodeo residence for drug use. It also alleges Nicholas used threats of physical violence, death, and bribed people to conceal his drug use.

A copy of Nicholas' stock-option backdating indictment is also available here (again, PDF warning).

The prosecution claims that Nicholas should be detained until trial due in part to his excessive wealth making him a flight risk and alleged history of threatening witnesses. The filing describes one alleged assault where Nicholas took his longtime friend and former personal attorney on a trip to Oakland on one of his private jets. During the flight, Nicholas is said to have taken his friend to the back of the jet where he accused the man of wearing a wire for the government. Nicholas allegedly told the man he would "chase him to the end of the Earth" if he "screwed him" by cooperating with the government, then struck the man in the face.

SANS - Survey on application security programs

More from The Register

next story
EU: Let's cost financial traders $400m a day, because EVIL BANKERS. Right?
Wait 'til this one hits your pension fund where it hurts
Systems meltdown plunges US immigration courts into pen-and-paper stone age
Massive outage could last four weeks, sources claim
Lavabit loses contempt of court appeal over protecting Snowden, customers
Judges rule complaints about government power are too little, too late
UK.gov chucks £28m at F1 tech for buses and diggers plan
Well, not really F1 but who's heard of LMP and VLN*?
Don't let no-hire pact suit witnesses call Steve Jobs a bullyboy, plead Apple and Google
'Irrelevant' character evidence should be excluded – lawyers
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
Edward Snowden on his Putin TV appearance: 'Why all the criticism?'
Denies Q&A cameo was meant to slam US, big-up Russia
Ex-Tony Blair adviser is new top boss at UK spy-hive GCHQ
Robert Hannigan to replace Sir Iain Lobban in the autumn
Judge halts spread of zombie Nortel patents to Texas in Google trial
Epic Rockstar patent war to be waged in California
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.