More woes for ex-CEO of Broadcom
Henry T. Nicholas III’s former wife accused the Broadcom Corp. billionaire Wednesday of squandering $60 million from their fortune on personal indulgences, including a $3.1-million limousine bill, and making misguided investments that have left her so cash-poor she can’t pay her tax bill.
In a probate court petition, Stacey Nicholas also claimed that her former husband repeatedly threatened her physically during a long harassment campaign, once whispering in her ear that he would have her “whacked.”
Henry Nicholas, she said, spent $1 million on detectives who tailed her, their three children and her boyfriend as far as Europe, and once “stalked [her] in gorilla masks and cameras outside a coffee shop when she was with a girlfriend.”
Nicholas could not be reached for comment, and his probate attorney, Joseph L. Wyatt, did not respond to requests for comment. Robert G. Magnuson, a former Los Angeles Times executive identified in the petition as the day-to-day manager of the Nicholas family trust, declined to comment.
The allegations were part of a demand by Stacey Nicholas that the Orange County Superior Court remove Henry Nicholas as co-trustee of their family trust for gross mismanagement.
They are the latest in a series of often-bizarre accusations against the tech billionaire, who faces prosecution on two federal indictments alleging conspiracies to distribute drugs and to backdate billions of dollars in stock options as secret rewards for employees of Irvine-based Broadcom.
“Mrs. Nicholas feels she can no longer countenance any involvement of her ex-husband as her co-trustee over the management of their assets, given the very serious nature of the criminal charges pending against him, as well as his conduct as a co-trustee,” said her attorney, Adam F. Streisand of Loeb & Loeb in Los Angeles.
“She will ask that the court replace Dr. Nicholas with an independent trust company,” Streisand said in a statement.
Henry Nicholas is also accused of options improprieties in a Securities and Exchange Commission civil lawsuit. His former personal chief operating officer, Magnuson predecessor Craig Gunther, has pleaded guilty to two misdemeanor counts of hiding the Nicholases’ frequent large cash bank withdrawals from tax authorities by structuring them to amounts less than $10,000.
Stacey Nicholas’ petition says the couple’s community estate, once worth nearly $2 billion, has shrunk to about $1 billion as a result of her former husband’s mismanagement. About $600 million is in private investments and the rest in Broadcom stock, she said.
The filing says that Henry Nicholas directed Gunther and Magnuson, “both of whom are cronies,” to distribute family trust assets solely for his benefit, “without obtaining the consent or permission” of Stacey Nicholas.
Henry Nicholas, 49, of Newport Coast, and Stacey Nicholas, 44, of Laguna Hills, were married in July 1987. She filed for divorce in October 2002 but put the case on hold after he quit as Broadcom’s chief executive, saying he wanted to patch up the marriage. She reopened the case in 2006.
According to Stacey Nicholas’ latest filing in the probate court case, a divorce court judge dissolved the couple’s marriage in March, but they continue to battle over financial and custody matters.
A federal grand jury in Santa Ana handed up the two indictments against Henry Nicholas in June. He has pleaded not guilty to both and is to be tried first on the drug charges and second for the alleged options fraud.
A four-count drug indictment alleged that he maintained homes and commercial properties for the “purpose of using and distributing controlled substances,” including cocaine and methamphetamine, and slipped drugs into the drinks of business associates to gain competitive advantage. The government is seeking to seize several of his properties and one of his personal airplanes in connection with that case, a fact Stacey Nicholas cited as evidence of how he was unfit to run their trust.
The second indictment, containing 21 charges, alleged that Henry Nicholas and William J. Ruehle, Broadcom’s former chief financial officer, backdated Broadcom stock options for five years to improperly reward employees in the cutthroat world of computer chip design. Ruehle also has pleaded not guilty.
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