One of America's most powerful businessmen has been indicted on multiple counts of using prostitutes, drug abuse and massive financial fraud, in the latest boardroom scandal to hit the US courts.

Henry T Nicholas III, the billionaire founder of the technology company Broadcom, was charged on Thursday with a litany of offences related to a high-flying lifestyle that prosecutors say saw him create a secret underground drugs lair at his home, and invite strippers to parties at a private warehouse stocked with cocaine and ecstasy.

In an 18-page indictment unsealed in Los Angeles on Thursday, Mr Nicholas, 48, was accused of buying and distributing hundreds of thousands of dollars worth of drugs over several years. He allegedly spiked the drinks of fellow executives with ecstasy, hired prostitutes for himself, his employees and his customers, and once smoked so much marijuana on his private jet to Las Vegas that the pilot was required to "put on an oxygen mask".

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A separate indictment accused Mr Nicholas of conspiracy and securities fraud in an alleged scheme to illegally backdate stock options which last year forced Broadcom, which makes semiconductors for mobile phones, to write off $2.2bn (£1.1bn). His former finance chief, William Ruehle, was also charged in connection to the alleged fraud, which could see both men sentenced to a total of 370 years in prison.

The former corporate whizz-kids deny all charges and their cases will be heard by a jury later this year. Mr Nicholas did not enter a plea during his court appearance on Thursday in Santa Ana, and was released on $3.3m bail to attend a private drug treatment clinic in Malibu.

Mr Ruehle, 66, who is not charged with the drug offences, was released on $2.6m bail.

Although the fraud charges carry longer sentences, it is the extraordinary nature of the drug allegations against Mr Nicholas that have dominated the headlines. An imposing, 6ft 6in tycoon with a PHD in electrical engineering, his estimated wealth, according to Forbes, is $2.3bn.

The indictment claims that between 1998 and 2003, Mr Nicholas kept four properties in Orange County and Las Vegas, including a warehouse in Laguna Niguel, California, for the storage and distribution of cocaine, metamphetamine and ecstasy. He later added rooms containing art and electronics, where he is said to have held parties at which drugs and prostitutes were provided for employees and customers.

On several occasions, Mr Nicholas allegedly spiked the drinks of fellow executives. In 1999, he is said to have slipped an ecstasy pill into a colleague's drink in New York State; in 2000, he is reported to have committed a similar transgression.

In a detail that resembles something from a Hollywood gangster movie, the indictment claims Mr Nicholas required drug suppliers to submit formal invoices using "various code words including, without limitation, 'supplies', 'party favours', 'refreshments', and 'E'." Payments of hundreds of thousands of dollars were authorised from his bank accounts.

The charges come five years after Mr Nicholas resigned from Broadcom, claiming he needed to save his marriage. His attorney, Gregory Craig, said he was innocent of all charges. "This is a kitchen-sink attack. They are trying to throw everything at him from eight years ago," he said.

A statement from Mr Ruehle's lawyer, Richard Marmaro, said: "Bill Ruehle is innocent of the charges, and he looks forward to the opportunity to clear his good name in a court of law."