Trevor Milton, the founder of electric- and hydrogen-powered truck maker Nikola, was sentenced to four years in prison on charges of defrauding investors, as reported by Reuters.
The sentence, delivered in U.S. District Court in Manhattan, was significantly less than the 11 years sought by prosecutors but exceeded the probation period requested by Milton’s attorneys.
Before his sentencing, Milton addressed Judge Edgar Ramos, stating, “I did not intend to harm anyone and I did not commit those crimes levied against me.” However, prosecutors highlighted Milton’s lack of remorse and his continued denial of accountability, urging the judge to consider his refusal to accept responsibility for his actions, reports CNBC.
In October 2022, Milton was convicted on two counts of wire fraud and one count of securities fraud. Under federal sentencing guidelines, he faced a potential sentence of 60 years for these crimes. Milton’s rapid rise to billionaire status came after taking Nikola public through a special purpose acquisition company (SPAC) deal in June 2020.
At its peak, Nikola was valued at over $30 billion and was seen as a promising EV startup. However, the company’s fortunes turned following allegations of false and misleading statements, initially brought to light by short-seller Hindenburg Research.
Prosecutors drew parallels between Milton and Elizabeth Holmes, the Theranos founder sentenced to over 11 years in prison for defrauding investors in her blood testing startup. They compared Milton’s lies about the operability of the Nikola One semitruck to Holmes’s deception about Theranos-manufactured blood analyzers.
Milton, in his defense, attempted to differentiate himself from Holmes, noting that Nikola remains a real business, unlike the now-defunct Theranos. Despite this claim, Milton resigned as executive chairman of Nikola in September 2020 following an internal investigation triggered by the Hindenburg report, which described the company as a “house of cards” built by Milton.
Since his resignation, Nikola’s fortunes have plummeted, with shares trading under $1 and a market value of approximately $327 million. The company has struggled to retain executives, with Nikola Chairman Stephen Girsky, who brought the company public through his SPAC, stepping in as CEO in August.
