The convicted founder of electric- and hydrogen-powered truck maker Nikola, Trevor Milton, has been sentenced to four years in prison by federal prosecutors in Manhattan. He was found guilty of lying to investors about the company’s technology by a jury last year. Milton misled investors by stating that Nikola had built an electric pickup from the “ground up” and that it had developed its own batteries. But in reality, he knew it was buying them. He even exaggerated about the early success of “Nikola One” semi-truck that he knew did not work.
After announcing the sentence at a hearing in federal court, US District Judge Edgar Ramos told Milton he was aware the statements he made about the company were false. “As difficult as it may be for you or your family to hear, I believe the jury got it right,” Ramos said. However, he allowed Milton to remain free on bail while he appeals his conviction.
Last week, prosecutors urged Ramos to sentence Milton, 41, to around 11 years in prison, citing that Theranos founder Elizabeth Holmes received a similar punishment last year after being found guilty of defrauding investors in her blood testing startup. “There has to be a message that whether you are an entrepreneur, a startup founder, a corporate executive, when you go out there and talk about your company, you must be honest,” Matthew Podolsky, a prosecutor, said at the hearing before the sentence was handed down.
On the other hand, Milton’s lawyers had said he should get probation. They argued that there may have been misstatements of his “deeply-held optimism” in his Phoenix-based company. They countered that Holmes’ case was different because her lies put people at medical risk. Milton spoke at length before he was sentenced, quoting Bible verses and talking about his family and rural upbringing. He told Ramos a sentence of probation would allow him to spend time with his wife as she recovers from illness.
Before being sentenced, Milton spoke at length, quoting Bible verses and talking about his family and rural upbringing. He told Ramos a sentence of probation would allow him to spend time with his wife as she recovers from illness. “I did not intend to harm anyone and I did not commit those crimes levied against me,” he argued. Though he convinced Ramos that his case was different from Holmes’ but his so-called “optimism” did not get a pass.
The company’s shares are now trading for less than USD 1, down from a peak of higher than USD 60 in June 2020.