Stephen L. Otten was part of the first Navy SEAL platoon behind enemy lines in Afghanistan after the 9/11 attacks, earning a Navy and Marine Corps Commendation Medal for "courage and expertise while conducting a flawless reconnaissance under the harshest conditions."
On Monday, Otten was sent behind bars for refusing to testify before a federal grand jury investigating allegations of stock manipulation by Newport Beach billionaire Henry T. Nicholas III, the co-founder of Irvine computer chip maker Broadcom Corp.
Otten, 30, who had been both bodyguard and companion of Nicholas' three children, said he felt the same unswerving loyalty to them as he had sworn to his commando comrades. But a federal judge in Santa Ana ruled he had failed to fulfill a higher duty -- to obey a court order -- and sent him to the city jail on civil contempt charges to ponder the possibility that a felony criminal charge of contempt might follow.
"Hopefully, in a short amount of time, that will compel Mr. Otten to do the right thing," U.S. District Judge James V. Selna said.
Otten, who left the Navy in January and resembles the pop star Sting, wore an intense and unchanging frown as the proceedings unfolded.
The courtroom session provided glimpses into two very private arenas: the personal life of Nicholas and the workings of the grand jury examining backdated stock options at Broadcom, whose chips are used in consumer products such as Nintendo Co.'s Wii game console.
Broadcom agreed April 22 to pay $12 million to settle a Securities and Exchange Commission lawsuit alleging that Nicholas and other executives "orchestrated and carried out" a scheme to recruit and retain employees by backdating options from June 1998 through May 2003. Backdating the options made them more valuable to the employees while concealing the expense from shareholders, the suit said.
Nicholas quit as Broadcom's chief executive at about the time the options backdating ended. He checked himself into the Betty Ford Clinic for rehabilitation last month, saying he had been drinking too heavily after the death of his stepfather.
While still a member of the SEALs, Otten began work in late 2006 as a weekend bodyguard and self-described nanny for Nicholas' two sons, now ages 11 and 14, and his daughter, who is 10, during their weekend stays with Nicholas, who is separated from his wife. By all accounts in court, the relationship became intense. Otten became a full-time employee in January.
