Ex-Broadcom head faces stock, drug charges

SANTA ANA, Calif., June 5 (UPI) -- One of the founders of Broadcom and a former chief financial officer were indicted in Southern California Thursday in connection with a massive stock scandal.

Henry Nichols and ex-Chief Financial Officer William Ruehle were ordered to appear before a federal magistrate in Orange County Thursday afternoon to answer charges they took part in a scheme to backdate stock options between 1999 and 2005, which resulted in the chip company writing down about $2.2 billion in profits.

"Nicholas and Ruehle were involved in a wide-ranging fraud that resulted in the largest financial restatement related to options backdating in the United States," said Thomas O'Brien, the U.S. attorney in Los Angeles.

The U.S. Attorney's Office said in a written statement statement that Nichols was also charged in a second indictment with numerous drug offenses.

The 48-year-old Orange County resident allegedly maintained a regular stash of cocaine, methamphetamine and ecstasy, which he allegedly used to spike the drinks of industry executives and Broadcom customer employees at parties.

Another allegation stated that Nichols and some associates allegedly smoked so much marijuana while flying on a private plane between Southern California and Las Vegas that the pilot had to put on an oxygen mask.