Broadcom co-founder Henry T. Nicholas III pleaded not guilty Monday to federal drug and securities fraud charges. The 48-year-old billionaire entered the pleas to 21 counts contained in two indictments unsealed June 5. One indictment details what authorities claim was one of the largest stock-option backdating cases in U.S. history while Nicholas led the giant computer chip company.

The other accuses him of drugging his business cohorts, hiring prostitutes and maintaining a drug warehouse.

Former Broadcom CFO William J. Ruehle pleaded not guilty to 21 securities fraud charges at the Monday hearing.

A trial date was set for July 29. Both men remained free on bond.

The charges against Nicholas depict a high-flying lifestyle that prosecutors said featured the former CEO jetting around the world in his two private planes, building a secret lair under his house and hiring strippers to party at a private warehouse stocked with cocaine, methamphetamine and ecstasy.

Last month, securities regulators alleged in a civil suit that Ruehle, Nicholas, Broadcom co-founder Henry Samueli and Broadcom general counsel David Dull falsified the company's reported income, leading to what is believed to be the largest-ever accounting restatement related to improper accounting for backdated stock options.

Broadcom had to restate its financial results in January 2007 because of the scheme and reported more than $2 billion in compensation expenses it hadn't accounted for.

Nicholas served as CEO and president from Broadcom's inception until he resigned in 2003. Ruehle, 65, joined the company in 1997 as vice president and chief financial officer and retired in 2006.

Samueli stepped down as chairman of the company's board of directors and planned to take a leave of absence as chief technology officer, according to a May statement from the Irvine-based company.

Written By GREG RISLING

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