Henry Nicholas III faces drug and stock option charges

Orange County zillionaire Henry T. Nicholas III appears to be in big trouble. The Times is reporting that he is facing “federal investigation and accusations from a former employee that threaten to tarnish his image as one of the tech industry’s leading entrepreneurs and one of Orange County’s most generous philanthropists.”

“Federal authorities are probing Nicholas’ role in the manipulation of stock option grants at Broadcom Corp., the Irvine company he co-founded and led until 2003. The inquiry follows an internal company review that found Nicholas bore “significant responsibility” for the so-called backdating of option grants.”

“In conducting their probe, federal investigators have taken note of a civil suit filed in Los Angeles County Superior Court by Kenji Kato, who worked for Nicholas as an administrative assistant for nearly seven years beginning in 1999.

In court filings, Kato alleged that Nicholas required him to oversee supplies of cocaine and other drugs, pay prostitutes from a “petty cash” fund and conceal his boss’ “extracurricular activities,” including his alleged drug use, from his wife and others.”

Wow! Nicholas makes L.A. Mayor Antonio Villaraigosa look like a choir boy.

So who is Kato? “Kato, 35, was a Pepperdine University graduate student in law and business when Nicholas hired him in 1999. The son of former Oxnard Mayor Tsujio Kato, he met Nicholas through an event-planning business operated by his brother, Dean Kato, according to records and interviews.”

Kato sounds credible to me.

In fact four other former Nicholas employees have made similar allegations, including:

“On regular occasions … I was ordered to fill-up up to 20 balloons of nitrous oxide and deliver them to Dr. Nicholas; or, when I was required to clean up after Dr. Nicholas I frequently found remnants of usage of drugs, such as straws and plates, residue of cocaine, nitrous oxide balloons and alcohol,” Gerald Wada, a staffer for four months in 2006, said in court papers.”

Nicholas’ ex-wife has also alleged drug use in her divorce case against him.

Nicholas has donated thousands of dollars to various political campaigns and causes, as follows:

  • $157,250 to the campaign for Jessica’s Law, Prop. 83
  • $11,200 to Jerry Brown’s campaign for State Attorney General
  • $10,000 to Arnold Schwarzenegger’s 2006 campaign for Governor
  • $11,000 to Steve Cooley’s campaign for L.A. District Attorney

Nicholas is also known for his efforts to defeat Prop 66, which would have revised California’s Three Strikes law. He pumped $3.5 million into the opposition campaign at the last minute, funding TV ads that helped to defeat the initiative, which I supported. Thanks to Nicholas a lot of criminals who were jailed for life due to non-violent crimes were left behind bars.

Ironically, it now appears that Nicholas himself might have a few felonies up his sleeve. He might yet regret opposing Prop. 66. It would be ironic if he ended up in jail with the same drug users he condemned to a life in prison.

About Admin

"Admin" is just editors Vern Nelson, Greg Diamond, or Ryan Cantor sharing something that they mostly didn't write themselves, but think you should see. Before December 2010, "Admin" may have been former blog owner Art Pedroza.