Trevor Milton, a former door-to-door salesman and college dropout, founded and became the CEO of the heavy-duty electric vehicle and fuel cell vehicle manufacturer the Nikola Corporation in 2015. In his trial in 2022, witnesses testified that he lied to ordinary investors about nearly every aspect of Nikola, especially about the company's supposedly zero-emission truck prototype. (Related: Study finds gas-powered vehicles are more economical than EVs.)
According to Milton, the prototype was already drivable even though it wasn't. He added that Nikola was already equipped to produce the necessary hydrogen needed to power the truck when it wasn't. He further boasted that the company already had a long list of sales orders, many of which for companies that did not exist.
Nikola was valued at over $13 billion before Milton's lies came to light
For Milton's crimes, a federal jury found him guilty of one count of securities fraud and three counts of wire fraud on October 2022.
During a recent hearing in Manhattan on Dec. 18, U.S. District Judge Edgardo Ramos sentenced Milton to four years in prison, ordered him to pay a $1 million fine and to surrender some of his properties in Utah. Milton is currently out on bail pending an appeal.
Thanks to Milton's fraudulent activities, he was able to take Nikola public through a Special Purpose Acquisition Company (SPAC) deal with General Motors (GM) in 2020 through a deal that saw GM acquire 11 percent of the company and secure former GM Vice Chairman Stephen Girsky a seat in Nikola's board of directors.
In exchange, Nikola was able to raise over $3 billion. Positive investor sentiment of Nikola caused the company's shares to debut at $65.90 per share, and at one point the company's valuation soared to $13 billion, making it temporarily more valuable than the Ford Motor Company.
Now, Nikola's shares are worth less than a dollar. Milton is no longer the company's CEO and his handpicked successor, Michael Lohscheller, has been replaced by Girsky.
During his trial, Milton tried to argue that the fabulous statements he previously made about the company referred to Nikola's business model. "I did not intend to harm anyone, and I did not commit those crimes," he said during one, rambling 30-minute statement before the court.
"The law does not grant a pass for good intentions," said Ramos after he sentenced Milton to four years in prison, noting how real people were hurt by his lies. "It is decidedly the obligation of business executives who are seeking to have the public purchase their stock to speak the truth."
Prosecutors believe that Milton's lies led to more than $660 million in losses for regular investors. Under federal sentencing guidelines, this should have landed Milton up to 60 years in prison. They conceded that this was too long, but the four years Ramos gave Milton is still less than half of the 11 years prosecutors wanted, which would have been akin to what Theranos founder Elizabeth Holmes received a year ago for similarly fraudulent statements she made to investors about her company's blood testing technology.
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