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Monday, June 16, 2008


June 15, 2008 --

LOS ANGELES - Henry Nicholas III had the makings of a real-life "Iron Man."

He was a 6-foot-6 genius billionaire with a chiseled frame, physical endurance and a taste for fast cars and gadgets.

He even had a secret cave.

And like the best-drawn comic-book heroes, the founder of chip-making firm Broadcom was haunted by demons: His sister was brutally murdered in 1984, and his father abandoned the family when Nicholas was 4.

But the Southern California tech whiz's larger-than-life pedigree didn't lead to a crime-fighting alter ego. Rather, it allegedly spurred marathon drug-fueled orgies inside his very own Xanadu, a suite in a warehouse in Laguna Niguel, Calif.

In an Oriental-themed, tricked-out parlor, Nicholas, his friends and a bevy of prostitutes would party and have sex for days - abusing cocaine, laughing gas and other drugs, as music from such chart-toppers as Led Zeppelin and Phil Collins played, according to court papers and a former employee.

The worker said the parlor had six couches. The main room was fashioned in a Far East motif and adorned in rugs and statues, including a four-foot stone figure of Medusa. There was a Jacuzzi for six. A bedroom in the back was used for sex and sleeping, the worker said.

"The Ponderosa," or "The Pond," was also fitted with an $18,000 wooden bar. The parties always had a bartender, including one who was a former construction worker at Nicholas' estate. The billionaire paid for him to attend bartending school to learn how to make cocktails, including Nicholas' favorite, the grasshopper, a sweetly potent mix of creme de menthe and cocoa.

A black box filled with cocaine and a grinder for crushing nearly pure coke rocks into powder would be on top of the bar, the former worker said. There would also be "whippets" - small metal canisters of nitrous oxide that, when inhaled through the mouth, produce an intense but short-lived high. But the party guests complained of how cold the cylinders were, so they were replaced by a tank of laughing gas, the worker said.

"The parties would last for 24 hours straight, sometimes longer," the worker told The Post last week.

But the high times came crashing down for Nicholas, 48, during the past year as court documents filed by former employees seeking back pay painted the billionaire as prone to making death threats against workers.

In another suit seeking unpaid wages, Kenji Kato, a former personal assistant, said he was forced to act as a drug courier, conceal Nicholas' illegal activities from family members and entertain clients with prostitutes.

But the feds fired off the most serious accusations, charging him with securities and wire fraud, filing false statements to the Securities and Exchange Commission and conspiracy to distribute illegal drugs, according to indictments unsealed on June 4. The government alleges that Nicholas handed out cocaine, ecstasy and nitrous oxide.

It also said he spiked the drinks of high-tech execs and representatives of Broadcom customers with ecstasy.

While he is out on $3.3 million bail, Nicholas is being electronically monitored and has been holed up since April at a $66,000-a-month rehab facility in Malibu.

His lawyers have denied the charges and declined to be interviewed for this story.

As recently as last summer, however, Nicholas was making light of the allegations that he provided prostitutes to clients.

"We started out as, but there was a typo," he joked to The Orange County Register.

The wanton wunderkind's meteoric rise to wealth and fame began during the frenzied days of the dot-com boom in the 1990s, when he founded Broadcom with friend and business associate Henry Samueli.

Armed with a Ph.D. in engineering, an encyclopedic mind and a legendary work ethic, Nicholas, as CEO, helped his company develop computer chips that made communication between machines faster.

Wired like the Energizer Bunny, the boy wonder of Orange County regularly worked 20-hour days, often subsisting on MET-Rx nutrition bars. Shortly after dawn, he would already be overseeing research, making business deals and adhering to an exercise regimen that would make a Navy SEAL buckle.

Family was an afterthought to work. His wife, Stacey, would reportedly have to come to Broadcom's offices in Irvine to see her husband during the day. In 1998, pregnant with their third child, Stacey reportedly scheduled childbirth around her husband's business schedule. She filed for divorce in 2002.

Known as a bellicose boss, Nicholas exacted the same dedication from his employees, who often bore the brunt of expletive-riddled tirades when projects fell behind schedule or problems arose, according to newspaper accounts.

Meanwhile, hundreds of employees became millionaires when the company went public in April 1998. Nicholas and Samueli's wealth ballooned as the stock price doubled to $53 per share.

By 2000, Forbes estimated the partners' net worth at $10 billion each. That number has dropped significantly as the company's stock has depreciated. Nicholas is now estimated to have $2 billion.

With his spoils, Nicholas went on lavish spending sprees and donated millions to philanthropies and causes close to his heart.

He donated $2.5 million to build a crime-victims memorial in Sacramento last year. And in 2004, he spent $3.5 million to defeat an initiative that would weaken the "three strikes" law in California.

The reasons were personal. Nicholas' younger sister, Marsalee, was killed by a drug-dealing ex-boyfriend when she was 22. "I'd say I have a moral vendetta against drug dealers because one killed my sister," Nicholas told The Register.

Most of his newfound fortune went to a vast array of homes, vehicles and gadgets. He owns a fleet of sports cars, including Lamborghinis and Ferraris. He also purchased a charter-airline company, whose fleet included three private jets and a helicopter.

Then there's his Laguna Hills estate, offering a panoramic view of sun-drenched Orange County. The 15,000-square-foot castle is wired with more than $1 million worth of computers. Its most peculiar claim to fame is secret passages that lead to an expansive tunnel system and an underground sports bar, gym and recording studio.

The underground bunker also showed his penchant for wild sex parties and his manic side. In August 2000, he hired contractors to build a second secret underground lair to which he could bring prostitutes and illegal drugs, according to a draft complaint in another lawsuit filed by the former contractors.

Nicholas demanded work be completed in a week while he whisked his wife to Hawaii for a vacation. He even threatened to kill a contractor after he complained to the billionaire of past-due wages, the complaint says. Reports say the lair was accessible by a door hidden on a paneled wall in the mansion's library and could be opened only by remote control.

According to court documents, the secrecy of the parties was shattered in May 2002, when his wife found him at the sex den after she flew home from vacation and found him high on drugs and having sex with a prostitute.

"When Stacey found out, she was very sad," the former worker said. "She didn't want to see him anymore."

She filed for divorce in the fall of that year, and Nicholas stepped down as Broadcom's chief executive in January 2003 to make his family his first priority.

Nicholas is due to be arraigned on the federal charges tomorrow.

1 comment:

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