Trevor Milton, the creator of Nikola, a manufacturer of electric trucks, was found guilty of fraud after being charged with boasting about nonexistent technology in an effort to raise the stock price of his business. Jordan Estes, an assistant US attorney, declared that Trevor Milton was a con artist. Simply said, “He lied to investors to collect their money.”
According to a New York Times report, a federal jury in U.S. District Court in Manhattan found Milton guilty of misleading investors by fabricating Nikola’s purported technical accomplishments.
Milton was found guilty of two counts of wire fraud as well as one count of securities fraud. The more serious of the counts carries a maximum prison sentence of 20 years.
Following four weeks of testimony, the jury apparently reached a decision after around six hours of discussion. Milton was permitted to remain free on a $100 million bond until his January sentence by U.S. District Judge Edgardo Ramos.
Milton was seen shaking his head after learning the judgment, seemingly in shock, as his wife Chelsey Milton sobbed while leaning her head against the back of a bench in the courtroom.
During the trial, prosecutors described Milton as a “con man,” who lied to investors, claiming Nikola was close to producing long-haul trucks that could run emission-free on cheap hydrogen.
“Trevor Milton is a con man,” Assistant U.S. Attorney Jordan Estes said on Thursday. “He lied to investors to get their money, plain and simple.”
Milton’s defense attorneys argued that the Nikola founder never intended to defraud anyone.
“He loved Nikola,” one of Milton’s defense lawyers, Marc Mukasey, told the jury on Thursday.
Mukasey also reportedly claimed that Milton would at times speak in the present tense about accomplishments he hoped for Nikola to achieve in the future. The attorney also likened his client to “an overenthusiastic parent who brags about his child,” the New York Times noted.
Nikola was reportedly able to avoid regulatory scrutiny typically applied to initial public offerings by making a deal with a so-called “blank-check” corporation, the report adds.
Milton, who owned 25 percent of Nikola shares, then went on a luxurious shopping spree after the stock market made him wealthy. Among his purchases included a Gulfstream jet and a multimillion-dollar home in the Turks and Caicos Islands.
In just six months of 2020, Nikola’s creator spent more over $80 million. Following that, the financial company Hindenburg Research charged Milton with making untrue claims about Nikola’s technology.
The situation serves as a warning about the risks of funding “pre-revenue” electric vehicle manufacturers, who have already shown to be in financial trouble.
For instance, Rivian Automotive, a manufacturer of electric trucks and SUVs, announced last week that it is recalling nearly all of its vehicles due to poorly placed fasteners that may result in the loss of steering control. In addition, this is Rivian’s third recall since it began making cars late last year.