Federal prosecutors stated that Nikola founder Trevor Milton will likely receive an 11-year prison sentence for defrauding investors, Reuters reports. Milton was convicted last year on two counts of wire fraud and a count of security fraud. During the trial, prosecutors called Milton a “con man” and argued that he lied about the electric and hydrogen-powered truck manufacturer when he led the company.
Milton purposely made comments about the company, especially the automaker’s dead marquee pickup truck, to mislead investors. While the Badger pickup was unveiled in February 2020, the truck was described internally as “vaporware” despite Milton continually stating it was done. He also claimed on social media that the Badger would be fitted with a drinking fountain.
The Nikola founder had a vested interest in how the company was perceived. Along with the shares he held, Milton was slated to earn even more shares if Nikola reached certain stock price milestones. He made false claims about Nikola reducing the cost of hydrogen production and lied about the company’s battery manufacturing capabilities.
According to court documents, Milton even told a potential fleet customer to double their reservation order from 50 to 100 trucks. He told the customer that he would half the refundable deposit so it wouldn’t cost more.
Milton is scheduled to be sentenced on December 18. Nikola paid a $125 million settlement with the Securities and Exchange Commission over the matter in 2021. Milton resigned from his position at Nikola in September 2020, but the truckmaker has been attempting to repair its image ever since.
