The last two years haven't been easy for Broadcom billionaire Henry T. Nicholas III.
He split up with his wife. He was accused of manipulating stock options at Broadcom Corp., the Irvine microchip company he co-founded. And federal prosecutors filed criminal charges against him, saying he supplied Broadcom clients with drugs and prostitutes.
On Monday, however, Nicholas received some good news: He might be getting his private jet back.
U.S. District Judge Cormac J. Carney told prosecutors pursuing drug charges and stock-option backdating charges against Nicholas that they had reached too far in seizing his Gulfstream IV, worth about $20 million, and telling him they were going to hold on to it indefinitely.
"It's not evidence. It's been used by so many different people. Whatever testing should have been done was done," Carney said. "Why does the government need this airplane?"
The airplane is just one part of a complicated series of cases against Nicholas, but how it is handled could prove vital to how the prosecution prepares for two trials set for next year.
Federal indictments made public in June by the U.S. attorney's office in Orange County accused Nicholas of illegally backdating stock options and of providing drugs to Broadcom customers. The Securities and Exchange Commission is pursuing a similar stock-option case against Nicholas.
His fellow Broadcom co-founder, Henry Samueli, who owns the Anaheim Ducks hockey team, pleaded guilty in June to one count of lying to the SEC and is expected to be sentenced later this month.
Then a different set of prosecutors with the U.S. attorney's office in Los Angeles -- which is focused on the federal civil statutes Nicholas allegedly violated -- seized one of Nicholas' planes, a Newport Coast home bought for $5.5 million in 2006 and a Las Vegas penthouse condominium bought in 2002 for $2.4 million.
Prosecutors are alleging that Nicholas used the jet repeatedly to carry cocaine, ecstasy and other drugs for parties at his homes in Las Vegas and Newport Beach and at a warehouse he owned in Laguna Niguel.
By going after the homes and the plane, they face the possibility that Nicholas' attorneys may demand to examine any evidence prosecutors have that could indicate the plane was used to carry drugs. Such a disclosure could provide clues as to the prosecution's intended courtroom strategy, revealing evidence to the defense long before the prosecution is ready to proceed.
