NEW YORK — The founder of Nikola Corp. was sentenced Monday to four years in prison for his conviction for exaggerating claims about his company's production of zero-emission 18-wheel trucks, causing investors to lose hundreds of thousands of dollars.
Trevor Milton learned his fate in Manhattan federal court when Judge Edgardo Ramos announced the verdict, saying he believed a jury “got it right” in convicting him in October 2022. The judge also ordered Milton to pay a $1 million fine.
“Over the course of many months, you used your considerable social media skills to promote your company in a manner that was materially false,” the judge said, noting that investors suffered heavy losses. “What you said over and over again in different media was wrong.”
Before the verdict was handed down, Milton fought through tears to deliver a half-hour statement portraying some of his actions as heroic against Nikola and his intentions sincere in trying to produce trucks that would not harm the environment.
He claimed that major companies in the industry have followed his lead in their efforts to create vehicles that leave behind a cleaner environment.
And he said he didn't leave his company because of crimes, but rather because his wife was dying.
Milton did not apologize directly to investors or anyone else, but he asked the judge to spare him from jail.
“I obviously feel terrible because of all the resources and time this has cost everyone. I don't think you can feel human without feeling terrible for everyone involved,” he said. “It was not my intention to harm others.”
Milton was convicted of fraud after prosecutors portrayed him as a con man after founding his company in a Utah basement six years earlier.
Prosecutors said Milton falsely claimed to have built his own revolutionary truck, which was actually a product of General Motors Corp. was stamped with Nikola's logo on it. There was also evidence that the company made videos of its trucks modified to hide their flaws.
Nikola's CEO, called as a government witness, testified that Milton was “prone to exaggeration” when pitching his venture to investors.
At sentencing, Assistant U.S. Attorney Matthew Podolsky urged “a significant prison sentence,” although less than the 27 years or more in prison that federal sentencing guidelines called for. Podolsky said Milton's numerous statements on social media allowed the company founder to “recruit a large number of people through the Internet. …to get a large number of people to trust him.”
He said the crime had caused harm to a large number of people.
Defense attorney Marc Mukasey urged no jail time, saying Milton had suffered immensely, leaving him “financially crippled” with private lawsuits and a Securities and Exchange Commission case yet to be resolved.
He said it would be difficult for Milton to find another job and for his client, “not being able to work is like not being able to breathe.”
Milton resigned in 2020 amid reports of fraud that sent Nikola's stock prices into a tailspin. Investors suffered heavy losses when reports questioned Milton's claims that the company had already produced zero-emission 18-wheel trucks.
The company paid $125 million in 2021 to settle a civil case against the company by the SEC. Nikola, which still operates from a headquarters in Arizona, has not admitted to any wrongdoing.