Trevor Milton, the disgraced founder and former CEO of electric truck startup Nikola, has been sentenced to four years in prison for securities fraud. The ruling by Judge Edgardo Ramos of U.S. District Court in Manhattan brings an end to a years-long saga in which Nikola’s stock soared 83% at one point, only to plummet months later amid fraud charges and contract cancellations.
The sentencing hearing was postponed four times, during which time Milton remained free on $100 million bail.
In his sentencing, Ramos said each charge carries a sentence of 48 months in prison, concurrent terms, and a $1 million fine. Milton is expected to appeal the ruling, which Ramos confirmed.
Milton sobbed before sentencing, pleading with Judge Ramos for leniency in a lengthy and often confusing statement. At one point, Milton said he had stepped down as Nikola’s CEO not because of the fraud allegations, but to support his wife.
“I resigned because my wife was suffering from a life-threatening illness,” he said. in his statement, shared by Inner City Press reporter Matthew Russell Lee in a social media post X. She suffered from medical malpractice, someone else’s plasma. So I resigned because of that – not because I was a fraud. Truth matters. I chose my wife over money and power. ”
Milton, 41, was found guilty by a jury in October 2022 of one count of securities fraud and two counts of wire fraud after being found guilty of lying to investors about the development of electric trucks to inflate Nikola’s stock price. received the verdict.
At the sentencing hearing, defense attorneys said Milton never intended to defraud investors or harm anyone. Rather, he claimed he just wanted to be loved and admired like Elon Musk. Prosecutors pushed back, arguing that he repeatedly lied and targeted individual investors.
Milton faced up to 60 years in prison, although federal prosecutors recommended an 11-year sentence. The government also sought a $5 million fine, the forfeiture of the Utah ranch, and unspecified restitution to investors. The amount of restitution will be determined after Monday’s sentencing hearing.
Prosecutors in the case say Milton has been defrauding investors since 2019 by making improper statements, including that Nikola built trucks “from scratch” and developed batteries that were actually purchased elsewhere. He is accusing them of having been. There’s also the infamous Nikola marketing video where the truck appears to be driving under its own power. In reality, it was rolling down the hill.
The video sparked an independent investigation, and Milton resigned in September 2020 after a Hindenburg Research report labeled the company a fraud. The company ultimately paid a $125 million penalty in a settlement with the U.S. Securities and Exchange Commission. Nikola’s stock price plummeted, causing significant losses not only to the company but also to investors.
In the end, Mr. Nikola sought a settlement with the SEC and reimbursement of the fine, and in October a New York arbitration panel ordered Mr. Milton to pay the company $165 million.
Milton has since pleaded not guilty to the charges, but his lawyers argue there is no evidence the former CEO intended to defraud investors. Any misstatements were a result of optimism and confidence in the company, they said. last month, Milton’s lawyer said: He must be placed on probation, in part to care for his sick wife.
Milton’s decision is one of the few high-profile cases involving a technology founder. Theranos founder Elizabeth Holmes is serving an 11-year sentence after being convicted of defrauding investors in her blood testing startup. Sam Bankman Fried, founder of cryptocurrency exchange FTX and cryptocurrency trading company Alameda Research, was found guilty in November on seven counts of fraud and money laundering.
The story is unfolding…
Source: techcrunch.com
