Trevor Milton, the disgraced founder of electric- and hydrogen-powered truck maker Nikola, just got some brutally bad news from a New York court. Though he got out of the full 11 years that prosecutors argued he should receive for his role in the scheme of defrauding Nikola’s investors, Milton was still sentenced to four years in prison over the scheme.
In addition to the nearly half-decade of prison time, Milton was sentenced to three further years of supervised release. He was also ordered to pay a nearly $1 million fine for the fraud and forced to forfeit property he owned in Utah. Those financial penalties are before restitution, which will be set in a future court proceeding.
Milton has already been convicted, In an October of 2022 trial, he was convicted on two counts of wire fraud over the scheme and one count of securities fraud, with prosecutors alleging that Milton made false claims about Nikola’s technology to draw in investors. Had he been sentenced to the maximum penalty for those crimes, Milton would have been in prison for sixty years, so the four years he received is a relative slap on the wrist by comparison.
In a statement on the case released by the DOJ, U.S. Attorney Damian Williams said, “Trevor Milton lied to investors again and again — on social media, on television, on podcasts, and in print. But today’s sentence should be a warning to start-up founders and corporate executives everywhere — ‘fake it till you make it’ is not an excuse for fraud, and if you mislead your investors, you will pay a stiff price.”
According to the DOJ, Milton lied to investors and potential investors about nearly every aspect of Nikola, including claiming that the company had created a functioning truck prototype, called “Nikola One,” when he knew that it was inoperable. He also lied about building and electric- and hydrogen-powered truck, claiming that Nikola had built it from the “ground up” whereas in reality that was not true and Nikola did not even produce any hydrogen.
Focusing on the Nikola One fiasco, the DOJ noted that Milton claimed that it “fully functions and works, which is really incredible,” but that in reality the prototype truck was never even completed, much less functional. It was even missing critical parts, such as the control system and motors. Still, Milton continued to claim that the truck was functional and even faked a video of it driving.
That came in January 2018, when he posted a video that purported to be of Nikola One driving down a road on its own power, whereas in reality the truck had been towed to a top of the hill and then the driver released the brakes, letting it roll to the bottom.
Milton then used those lies to inflate the company’s stock price and to pressure an individual into accepting options for Nikola stock in exchange for the aforementioned Utah property, a ranch. In so doing, he defrauded retail investors, as the company’s technology was not functional, despite his claims.
Featured image credit: By Miljøstiftelsen ZERO – https://www.flickr.com/photos/zero_org/38356564832/, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=135798053
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