Trevor Milton, the disgraced founder and former CEO of electric truck startup Nikola, was sentenced Monday to four years in prison for securities fraud. The sentence, by Judge Edgardo Ramos in the U.S. District Court in Manhattan, caps a multi-year saga that at one point sent Nikola stock soaring 83% only to come crashing down months later over accusations of fraud and canceled contracts.
The sentencing hearing comes after four separate delays, during which Milton has remained free under a $100 million bond.
In his ruling, Ramos said he would impose a sentence of 48 months on each count, served concurrently, and a fine of $1 million. Milton is expected to appeal the sentence, which Ramos acknowledged.
Milton sobbed as he pled with Judge Ramos for leniency in a long and often confusing statement ahead of the sentencing. At one point, Milton said he stepped down from the CEO post at Nikola not because of fraud allegations, but to support his wife.
“I stepped down because my wife was suffering live threatening sickness,” he said in his statement, which reporter Matthew Russell Lee of Inner City Press shared on social media post X. She suffered medical malpractice, someone else’s plasma. So I stepped down for that – not because I was a fraud. The truth matters. I chose my wife over money or power.”
Milton, 41, was convicted by a jury in October 2022 of one count of securities fraud and two counts of wire fraud after he was found guilty of lying to investors about the development of Nikola’s electric trucks in order to inflate the company’s stock price.
During the sentencing hearing, defense attorneys said that Milton wasn’t trying to defraud investors or intending to harm anyone. Instead, they argued he simply wanted to be loved and praised like Elon Musk. Prosecutors pushed back and said he lied repeatedly and targeted retail investors.
Federal prosecutors recommended an 11-year sentence, but Milton faced a maximum term of 60 years in prison. The government also sought a $5 million fine, forfeiture of a ranch in Utah and an undetermined amount of restitution to investors. Restitution will be determined after Monday’s sentencing hearing.
Prosecutors in the case have accused Milton of deceiving investors since 2019 by making improper statements, including that Nikola had built a truck from the “ground up” and developed batteries that were actually bought elsewhere. There’s also the infamous Nikola marketing video that shows a truck appearing to drive on its own power. In reality, it was rolling down a hill.
That video sparked investigations from third parties, and after a report by Hindenburg Research called the company a fraud, Milton stepped down in September 2020. The company ultimately paid a $125 million penalty in a settlement with the U.S. Securities and Exchange Commission. Nikola’s stock collapsed, resulting in serious losses for investors, as well as the company.
Nikola ended up seeking reimbursement for the SEC settlement and fine, and in October an arbitration panel in New York ordered Milton to pay the company $165 million.
Milton pleaded not guilty after his indictment, and his lawyers have insisted that there’s no evidence that the former CEO intended to defraud investors. Any misstatements were the result of optimism and belief in the company, they said. Last month, Milton’s lawyers said he should get probation, in part to care for his ailing wife.
Milton’s sentencing is one of a small handful of high-profile cases involving tech founders. Elizabeth Holmes, founder of Theranos, is serving an 11-year prison term after she was found guilty of defrauding investors in her blood-testing startup. Sam Bankman-Fried, founder of crypto exchange FTX and crypto trading firm Alameda Research, was found guilty in November on seven counts of fraud and money laundering.
