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SALT LAKE CITY — Trevor Milton, a Utah native and founder of Nikola Corp., was sentenced to four years in prison and ordered to pay a $1 million fine by a federal judge following his conviction for defrauding investors in the electric semitruck company he launched from Salt Lake City in 2014.
On Monday, Damian Williams, United States Attorney for the Southern District of New York, announced that Milton was sentenced by U.S. District Judge Edgardo Ramos to four years in prison for engaging in securities and wire fraud in connection with his scheme to defraud and mislead investors about the development of products and technology by the company he founded, Nikola Corp. Milton was convicted following a one-month jury trial in October 2022 before Judge Ramos.
Prosecutors said Milton leveraged social media postings and made statements to other media outlets aiming to entice investment in his startup, which had been working to develop battery-powered and hydrogen fuel celled electric vehicles. Milton's conduct has been compared to Elizabeth Holmes, the convicted fraudster who made inflated claims about Theranos, the failed blood testing startup she founded.
"Trevor Milton lied to investors again and again — on social media, on television, on podcasts and in print," Williams said in a statement. "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."
Prosecutors said Milton made numerous fraudulent claims that led to some $600 million in investors losses, including that the company had found early success in developing a fully-functioning semitruck prototype that was, in fact, not operable; had built a hydrogen-powered pickup truck called "the Badger" from the ground up using Nikola manufactured parts and technology, which wasn't true; falsely claimed Nikola was producing hydrogen; and deceived investors about guaranteed pre-orders of Nikola trucks that were actually contracts that could be canceled at any time.
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.
–Damian Williams, U.S. Attorney for the Southern District of New York
Prosecutors were seeking an 11-year sentence for Milton, similar to the sentence Holmes received last year for defrauding Theranos' investors.
The 41-year-old Milton did not apologize directly to investors or anyone else, but he asked the judge to spare him from prison, per the Associated Press.
"I obviously feel awful for all the resources and time this has caused everybody. I don't think you can feel human without feeling terrible for everyone involved," Milton said.
Milton walked away from Nikola Motor Co., as it was known at the time, in 2020, amid allegations of misleading investors and reports of inquiries underway by both the U.S. Securities and Exchange Commission and U.S. Department of Justice.
His exit came just weeks after Hindenburg Research, an investment firm that specializes in market short-selling that would stand to gain from a drop in Nikola stock prices, published a report alleging instances of Milton making false statements about Nikola's technological innovations in what it called "an intricate fraud."
Milton and Nikola representatives disputed those allegations at the time and claimed Hindenburg's accusations were an attempt at "market manipulation" timed in accordance with a $2 billion deal with General Motors that gave the Detroit automobile giant an 11% stake in Nikola.
In June 2020, Nikola stock was trading near $80 a share with a market capitalization exceeding $30 billion. At the end of regular trading on Monday, Nikola stock was trading at 83 cents per share.
I did not intend to harm anyone and I did not commit those crimes levied against me.
–Trevor Milton
The company paid $125 million in 2021 to settle a civil case against it by the U.S. Securities and Exchange Commission, per AP. Nikola, which continues to operate from an Arizona headquarters, didn't admit any wrongdoing in the case.
Milton spoke at length before he was sentenced, quoting Bible verses and talking about his family and upbringing in rural southern Utah, according to a report from Reuters. He told Ramos a sentence of probation, which his attorneys were arguing for, would allow him to spend time with his wife as she recovers from illness.
"I did not intend to harm anyone and I did not commit those crimes levied against me," Milton said.
