Nikola Founder Trevor Milton Sentenced to Prison for Fraud

Nikola Corp. founder Trevor Milton, has been sentenced to four years in prison after a fraud conviction in the United States.

The former CEO of electric truck startup Nikola, was convicted after a jury found he had lied continuously about the company. His claims had sent Nikola stocks soaring only to come crashing down months later over the fraud accusations.

Damian Williams, US Attorney for the Southern District of New York, said the sentence would “serve as a warning to start-up founders and corporate executives everywhere- ‘fake it you make it’ is not an excuse for fraud, and if you mislead your investors, you will pay a stiff price”

Nikola corp. is an American manufacturer of heavy-duty commercial battery-electric vehicles, fuel-cell electric vehicles and energy solutions. The company went public in 2020 and Milton became an overnight billionaire when the company was valued at over $20bn.

However, in September 2020, the Securities and Exchange Commission and the Department of Justice launched investigation into the company’s fraud allegations. The investigations found that Milton had “made false claims regarding almost all aspects of Nikola’s business.”

Milton was convicted in October  2022 on two counts of wire fraud and one count of securities fraud after he was found guilty of lying to investors about the development of Nikola’s electric trucks so as to inflate company’s stock price.

In his ruling, Judge Edgardo Ramos in the U.S. District Court in Manhattan, said “over the course of many months, you used your considerable social media skills to tout your company in ways that were materially false.”

“What you said over and over on different media outlets was wrong”, said Judge Ramos.

Federal prosecutors recommended an 11-year sentence, but Milton faced a maximum term of 60 years in prison. Milton was also sentenced to three years of supervised release, ordered to forfeit property and was asked to pay a fine of $1million.

Restitution will be determined at a future hearing, according to the U.S. Attorney’s Office for the Southern District of New York.

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