Trevor Milton, the convicted founder of Nikola, is aiming to avoid imprisonment as his legal team argues for probation in light of distinct circumstances compared to the case of Elizabeth Holmes, the founder of Theranos. Milton, found guilty on charges of wire fraud and securities fraud, faces sentencing on November 28, 2022.
Prosecution’s allegations
The federal jury convicted Milton in October 2022, with prosecutors characterising him as a “con man” who misled investors about Nikola’s technology. Allegations included false claims about developing a pickup from scratch, misrepresenting the source of batteries, and presenting a non-functional “Nikola One” semi-truck.
Defence’s argument for probation
In a recent court filing, Milton’s lawyers urged probation for their client, emphasising his responsibility to care for his ailing wife. They contend that Milton’s optimistic beliefs in Nikola did not stem from ill intent but rather from his genuine faith in the Phoenix-based company. The filing highlighted Milton’s willingness to acknowledge and rectify his shortcomings when made aware of them.
Comparison with Elizabeth Holmes case
Milton’s defence distinguished his case from Elizabeth Holmes’, stating that Theranos was not a “real company with real products.” They argued that Milton’s misstatements did not pose a medical risk, unlike Holmes’ actions. Holmes is presently serving an 11-1/4-year prison term and is appealing the decision, initially seeking 18 months of home confinement.
Sentencing discrepancy
Probation officers recommended a potential prison term of 17-1/2 to nearly 22 years for Milton under federal sentencing guidelines, which the defence contests. Milton’s lawyers propose a sentencing range of 12 to 18 months. The U.S. Attorney Damian Williams in Manhattan is expected to submit its own sentencing recommendation.
Market impact on Nikola
Nikola’s market value has significantly declined, with shares trading near $1, marking a stark contrast to the company’s peak valuation above $30 billion in June 2020. The legal developments and uncertainties surrounding Milton’s sentencing continue to impact Nikola’s market standing.
Trevor Milton’s legal manoeuvres focus on securing probation, presenting his case as distinct from other high-profile fraud convictions and emphasising personal circumstances. The upcoming sentencing will be pivotal in determining the final legal outcome for the founder of the electric and hydrogen-powered truck maker, Nikola.