Trevor Milton who founded Nikola – an electric car company once compared to Elon Musk’s Tesla, was sentenced to four years in prison on Monday for making false claims about his company.
The sentence comes after Milton, 41, was convicted on federal charges of securities fraud and wire fraud in October 2022, according to CNN. Prosecutors in a New York court accused Milton of making misleading statements about “nearly all aspects of the business.”
In addition to the four-year sentence, Milton must pay a $1 million fine and turn over a property in Utah, according to a press release from the Justice Department. He will also have three years of supervised release after his sentence.
“Trevor Milton lied to investors again and again — on social media, on television, on podcasts, and in print,” U.S. Attorney Damian Williams said in the press release. “But today’s sentence should be a warning to start-up founders and corporate executives everywhere — ‘fake it till you make it’ is not an excuse for fraud, and if you mislead your investors, you will pay a stiff price.”
Prosecutors claimed that Milton’s exaggerations lost investors a total of $660 million, according to ABC News.
In one instance, Milton allegedly claimed that a prototype of a hydrogen-powered semi-truck was fully functional but it was really missing crucial parts and systems.
Milton was also accused of preying on vulnerable investors during the Covid-19 pandemic, according to a 50-page indictment in 2021.
Milton started Nikola in 2014, and his hydrogen fuel cell technology and electric batteries were compared to Tesla. The company went public in 2020 and entered a $2 billion partnership with General Motors that same year. Milton stepped down as CEO in 2020.
Shares of the company were trading at $79.73 in June 2020, but now are trading for less than a dollar.
Milton’s fortune peaked in June 2020 with a net worth of $8.7 billion, per Forbes, but his billionaire status ended by late 2021 as allegations began to arise and the stock began to decline.
