Nikola founder Trevor Milton has been sentenced to four years in prison for defrauding investors. The verdict, handed down by US District Judge Edgardo Ramos, comes after Milton was found guilty in October 2022 on two counts of wire fraud and one count of securities fraud.
The four-year sentence is not as much as prosecutors were seeking, who had initially sought an 11-year sentence, but does include a $1 million fine and potential property forfeiture. Despite Milton’s claims of innocence and lack of intent to harm, prosecutors argued that his repeated false statements on social media, television, and podcasts warranted a stern penalty.
Milton, who became an overnight billionaire when Nikola went public through a special purpose acquisition company in June 2020, faced allegations that echoed the notorious case of Theranos founder Elizabeth Holmes. The prosecution argued that, much like Holmes, Milton misled investors by exaggerating the capabilities of Nikola’s products, particularly the Nikola One semitruck.
The defense attempted to distance Milton from Holmes, who herself received an 11-year sentence, by highlighting Nikola as a genuine business.
Nikola, once valued at over $30 billion and considered a promising electric vehicle startup, faced a downfall following the revelations of false statements. Milton’s resignation in September 2020 triggered a decline in Nikola’s stock value, currently trading under $1 with a market value of about $296 million.