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[Published: Thursday 19, July 2007 - 09:01]
By Leonard Doyle in Washington
Henry T Nicholas III was, for a brief period, one of the richest men in
America. A patron of the Orange County arts scene, he had a trophy wife and
enjoyed playing Rod Stewart numbers at full volume from the steps of his
mansion.
The 6ft 6ins engineer founded the company Broadcom in 1991, making the innards
of cable TV boxes at his Redondo Beach apartment. When it floated in the go-go
years of the internet boom, his shares went up in value 40 times and he soon
acquired the trappings of the super rich: private jets, a Lamborghini and a
mansion in Laguna Hills with its own equestrian estate and, court documents
claim, his personal brothel, hidden in an underground grotto.
The grotto was reached by hidden doors with secret levers, leading to tunnels
and a 2,000sq-ft underground sports bar called "Nick's Caf ". According to
claims in court papers, this was a "secret and convenient lair", to cater for
"Mr Nicholas's manic obsession with prostitutes" and his "addiction to cocaine
and ecstasy".
He used his private jet to pick up prostitutes as far away as New Orleans,
Chicago, Las Vegas and Los Angeles "and bring them back to the Pond for his
rock star friends", according to documents filed with Orange County Superior
Court. "He provided his guests with transportation and cocaine, ecstasy,
methamphetamines, marijuana, mushrooms, and nitrous oxide [laughing gas]".
In January 2003, Mr Nicholas quit Broadcom, saying he intended to spend more
time with his children and tend to his marriage. Among the many legal troubles
he now faces is a divorce battle with his wife Stacey, with whom he controls
$1.1bn in Broadcom shares.
Mr Nicholas apparently told his wife about the underground passageways and
rooms under their mansion when work began. But the construction was said to be
far more elaborate than she imagined and ultimately cost $30m to build over
three years.
In August 2000, Mr Nicholas took his wife to Hawaii for a week while work was
being finished. The contractors were "threatened with financial ruin - whatever
it took - if they failed to complete the task within a week", it is claimed.
But the noise and the sight of armed guards blocking public horse-trails near
the site led neighbours to complain. The authorities shut the building site.
They did not know "the [underground] room ceiling was covered over so it was
not observable from above ground", according to the contractors.
At the time, Mr Nicholas told the Los Angeles Times the structure was "a
pump-house" for run-off water. The contractors say the underground site, called
Ponderosa, "was infamous for excessive extravagance, its sex rooms and its
million-dollar sound equipment", the documents claimed. The allegations were
made by a construction company which says it was not paid. The claims have been
denounced as falsehoods by Mr Nicholas's lawyer but echo other claims made by
Kenji Kato, Mr Nicholas's former assistant. Mr Kato says he is owed $150,000 in
back wages, and alleges serial drug use and other debauchery at the mansion.