Henry Nicholas III speaks to the Times about his troubles

The L.A. Times published an update yesterday regarding the travails of O.C. Zillionaire Henry Nicholas III, the co-founder of Broadcom.

According to the article, “The former Broadcom Corp. chief executive is talking to lawyers a lot these days as he endures a public spotlight fueled by a federal investigation into stock manipulation at Broadcom, allegations of drug abuse, an acrimonious divorce and a claim that he once sought to build a subterranean pleasure zone beneath a Laguna Hills mansion.”

Predictably he “denies any wrongdoing and says through his attorney that some of his accusers are simply trying to extort money from him.”

I wrote about this story a few weeks ago and pointed out the hypocrisy of a guy being charged with drug abuse after he helped to kill 3 Strikes reform – condemning thousands of other drug users to a lifetime in prison.

Here are a few choice excerpts from the Times article:

Nicholas’ wife, Stacey, had filed for divorce in fall 2002, soon after, court records show, a group of contractors threatened to disclose Nicholas’ alleged effort to build a secret “lair” beneath his Laguna Hills home to indulge in prostitutes and illicit drugs.

The divorce case was dormant until last year, when Stacey Nicholas revived it, according to divorce-court filings, some of which The Times reviewed in December, shortly before the file was sealed at the couple’s request. The couple’s filings contain competing allegations of drug abuse and infidelity, and as part of the child-custody proceedings Henry Nicholas agreed to undergo alcohol and drug testing during a two-month period.

The divorce proceedings, still incomplete, resulted in an agreement in November that allows a son, 10, and daughter, 9, to visit Nicholas on the weekends, the billionaire said. His oldest son, a 13-year-old, no longer talks to him and doesn’t visit.

Kato alleges that the billionaire owes him $150,000 in back wages. His duties were at first “innocent and clean,” Kato wrote in court papers, and included such tasks as arranging for private jets and limos, securing backstage passes to concerts and planning parties “fit for only billionaires.”

But as time went on, Nicholas’ excesses — in drugs and women — took over as his former boss became erratic and abusive, stayed awake for days on end, slipped drugs into others’ drinks and boasted of being so powerful he could make people “disappear,” Kato contended in his suit and in an interview with The Times.

Kato’s allegations are being examined by federal authorities probing Nicholas’ role in the manipulation of stock options at Broadcom, according to people with knowledge of the investigation. Earlier this year, the company’s own investigation found that Nicholas bore “significant responsibility” for the so-called backdating of options to make them more valuable.

“He wanted so much to be cool and accepted,” Kato said. “That’s why he surrounded himself with rock stars.”