Trevor Milton, the discredited founder and former CEO of Nikola, was sentenced to four years in jail for securities fraud on Monday. The sentence, which Judge Edgardo Ramos imposed in the United States District Court for the Southern District of New York, brings to an end a multi-year story in which Nikola stock rose 83% at one point before falling precipitously months later as a result of fraud allegations and canceled contracts.
The sentence hearing comes after four delays, during which Milton has been free on $100,000 bail.
Ramos said in his verdict that he would impose a 48-month sentence on each count, to be served consecutively, as well as a $1 million fine. Milton is anticipated to file an appeal, which Ramos recognized.
Milton cried as he begged Judge Ramos for mercy in a lengthy and sometimes incoherent plea before his sentence. Milton said at one time that he resigned as CEO of Nikola not due to fraud suspicions but to support his wife.
“I stepped down because my wife was suffering from a life-threatening illness,” he stated in his message, which Inner City Press writer Matthew Russell Lee published on social network post X. Someone else’s plasma caused her medical malpractice. So I resigned for that reason, not because I was a liar. The truth is important. I would rather have my wife than money or power.”
Milton, 41, was found guilty of one count of securities fraud and two counts of wire fraud by a jury in October 2022 after lying to investors about the progress of Nikola’s electric trucks in order to raise the company’s stock price.
During the sentence hearing, defense counsel said that Milton had no intention of defrauding investors or causing damage to anybody. Instead, they said that he merely wanted to be adored and appreciated in the same way that Elon Musk was. Prosecutors said that he lied often and targeted ordinary investors.
Although federal prosecutors proposed an 11-year sentence, Milton faced a potential prison term of 60 years. The government also demanded a $5 million fine, confiscation of a property in Utah, and unspecified reimbursement to investors. Restitution will be decided during the sentence hearing on Monday.
Prosecutors in the case have accused Milton of defrauding investors since 2019 by making false assertions, such as claiming Nikola had created a vehicle from the “ground up” and manufactured batteries that were purchased elsewhere. There’s also the famed Nikola commercial film, in which a truck seems to drive itself. It was really rolling down a slope.
That video spurred third-party investigations, and Milton stepped down in September 2020 after Hindenburg Research labeled the firm a scam. In the end, the business agreed to pay a $125 million penalty to the Securities and Exchange Commission. Nikola’s stock plummeted, causing significant losses for both investors and the firm.
Nikola eventually sought restitution for the SEC settlement and punishment, and in October, a New York arbitration tribunal ordered Milton to pay the firm $165 million.
Following his indictment, Milton pleaded not guilty, and his attorneys have argued that there is no proof that the former CEO meant to deceive investors. They said that any inaccuracies were the consequence of their excitement and faith in the organization. Milton’s attorneys suggested last month that he should be given probation in order to care for his ill wife.
Milton’s sentence is one of just a few high-profile instances involving technology innovators. Elizabeth Holmes, the founder of Theranos, is serving an 11-year jail sentence for scamming investors in her blood-testing firm. Sam Bankman-Fried, the founder of FTX and Alameda Research, was convicted of seven charges of fraud and money laundering in November.
