Samueli pleads guilty to lying

Local philanthropist, owner of the Anaheim Ducks and Corona del Mar resident Henry Samueli pleaded guilty to lying to the Securities and Exchange Commission about his involvement in a stock option scandal in federal court Monday.

Samueli stood beside his attorney, Gordon Greenberg, as Judge Cormac Carney explained to him in meticulous detail the provisions of his plea agreement, which included five years of probation and more than $12 million in fines. Sentencing for Samueli is set for Aug. 18.

Carney expressed concerns that Henry Nicholas III, who founded Irvine-based computer chip maker Broadcom Corp. with Samueli, might be angered by Samueli’s “better treatment.”

Nicholas faces years in prison if convicted of felonies associated with backdating stock options.

“You know Dr. Nicholas will complain about this,” Carney said.

By accepting the terms of the plea agreement, Samueli forfeits his right to a jury trial. During his probation he will not be under house arrest and will be allowed to travel.

If he had gone to trial, Samueli faced up to five years in prison. Monday, he admitted he was involved in the stock option granting process in which Broadcom gave stock options to employees and fraudulently said they were awarded at earlier dates, when the stock was trading at a lower price.

This allowed the company to reward its employees above and beyond the compensation the company reported to its shareholders.

In sworn testimony before the SEC in 2007 Samueli said, “I was not involved in the actual granting process, but Mr. Nicholas would make me aware of the amount of the grants that he was going to give ... ” “As [Samueli] knew at the time, his statement was false,” said Assistant U.S. Atty. Robb C. Adkins, who is prosecuting the case.

The judge also questioned the prosecution about the $12 million fine, saying he wasn’t sure of the legality of imposing a penalty far greater than the $250,000 maximum fine Samueli would have faced in a trial. Adkins assured him the penalty was an option in plea deals and promised to brief the judge later.

Samueli is a prolific philanthropist in the Newport-Mesa area, having donated hundreds of millions of dollars to arts and education institutions, among others. The billionaire has lent his name to a theater at the Orange County Performing Arts Center in Costa Mesa and the engineering program at UCI.

After the proceedings, Samueli and his wife, who sat in the back of the courtroom, piled into a beige minivan with Greenberg. Samueli, Greenberg and Adkins all declined comment on the agreement.

ALAN BLANK may be reached at (714) 966-4623 or at [email protected].