SANTA ANA – A federal judge on Wednesday threw out the guilty plea of Broadcom Corp. co-founder Henry Samueli, rejecting the government’s charge against him of lying to investigators.

U.S. District Judge Cormac J. Carney made the unexpected ruling after hearing Samueli testify in the criminal accounting-fraud trial of Broadcom’s former chief financial officer, William J. Ruehle.

Samueli, a billionaire philanthropist who also owns the Anaheim Ducks, pleaded guilty in June 2008 to lying to the Securities and Exchange Commission about his involvement with the granting of backdated stock options to Broadcom employees. He faced up to five years in prison – and was awaiting sentencing by Carney.

Carney’s decision comes two days after Samueli’s defense team asked the judge to dismiss the case against him, citing leaks to the media by Assistant U.S. Attorney Andrew Stolper of private grand jury information.

Carney replied at the time that he was troubled by the allegation of government misconduct but wanted to hear Samueli testify before making a decision.

“I am going to set aside your guilty plea and I am going to dismiss your information against you,” Carney told Samueli Wednesday. “I have looked at the plea agreement. I have listened to your testimony and you didn’t make a false material statement.”

Samueli responded: “You have restored my faith in the criminal justice system. … Thank you your Honor.”

“I’m very emotional,” Samueli continued. “I’m sorry. First I have to say you are a wise and a great man … the fact that you truly understand what happened to me. I came here to testify truthfully, and to best of my recollection. The fact you recognized what happened here, really says a lot.”

Prosecutors declined to comment on the judge’s decision.

Carney reiterated his concern about alleged government misconduct. He scheduled a hearing for Tuesday when he will consider dismissing the case against Ruehle. Stolper on Wednesday admitted leaking some information to the media.

The judge also ordered that the U.S. Treasury return $12 million that Samueli agreed to pay when he pleaded guilty, but Assistant U.S. Attorney Robb Adkins clarified that the money had yet to be paid.

Outside the courtroom, Samueli said he was in shock.

“First of all, I’m enormously grateful to Judge Carney for seeing the truth. … Finally I’m able to put this all behind me,” he said.

He added that the government’s case against him “shook his belief in the criminal justice system,” and that the case has weighed him down the last few years.

“How do I live my life as a felon?” he said.

His wife, Susan, cried and hugged her husband. She said she was “thrilled” the case was thrown out. “Henry is the most ethical man I’ve ever met,” she said. “Broadcom is the most ethical company.”

Samueli’s attorney, Gordon Greenberg, said it was unlikely Samueli would face any new charges in the options backdating case against Broadcom executives.

“It’s done from our perspective,” Greenberg said.

Broadcom’s chief executive, Scott McGregor, expressed “tremendous gratitude” for Carney’s decision.

Samueli “is one of the most brilliant minds of his generation,” McGregor said in a statement. “Today’s decision by the court means that Dr. Samueli will continue to devote his extraordinary engineering expertise for the best interests of Broadcom’s employees, shareholders, and the many other businesses that rely on Broadcom’s continued great success.”

The Ducks issued a statement in which Samueli and his wife, Susan, thanked fans and team personnel for standing behind them “through the entire process.”

Earlier Wednesday, Samueli admitted he didn’t tell the truth when he told the SEC he wasn’t involved in Broadcom’s options-granting process.

“I made that false statement and I accept it, but I bang myself in the head for making it,” he said on the witness stand.

However, Carney told Samueli that while his answer to the SEC’s question was “ambiguous, evasive and arguably non-responsive,” it did not amount to a material false statement.

Options backdating itself – granting company stock options to employees after their effective date – is not illegal, but must be reported to shareholders.

Broadcom, a Fortune 500 company which has 7,000 employees worldwide, captured headlines in 2007 when the company restated earnings by $2.2 billion to account for backdated options that weren’t reported.

Assistant U.S. Attorney Greg Staples cross-examined Samueli, who admitted he was minimally involved in granting stock options to employees.

He said Ruehle, and former vice-president of human resources Nancy Tullos “were both intimately involved in the options process.”

Tullos, a witness for the government, testified earlier in the trial that Ruehle helped facilitate the backdating of stock options and falsifying of documents at the Irvine chip manufacturer.

Register staff writers Eugene W. Fields and Mathew Padilla contributed.