Trevor Milton, the disgraced founder and former boss of electric and hydrogen truck company Nikola, has been sentenced to four years in prison, after a jury last year found him guilty a year ago of lying to investors about the company’s technology.
Federal prosecutors alleged Milton had misled investors by saying the company had built an electric pick-up, or ute, from the “ground up” and that it had developed its own batteries, even though he knew it was buying them.
Prosecutors had called for an  11-year sentence, but in the federal court in Manhattan, US District Judge Edgar Ramos sentenced him to four years in prison, Reuters reports.
“There has to be a message that whether you are an entrepreneur, a startup founder, a corporate executive, when you go out there and talk about your company, you must be honest,” Matthew Podolsky, a prosecutor, said at the hearing before the sentence was handed down.
Milton resigned from Nikola in 2020, soon after allegations of fraud surfaced just two weeks after the company signed a $2 billion partnership with General Motors.
A report from Hindenburg Research had described the company as “an intricate fraud” and that its success was based on “an ocean of lies”. This included including showing a truck rolling downhill to give the impression it was cruising on a highway, and stencilling the words “hydrogen electric” on the side of a vehicle that was actually powered by gas, CBS reports.
Milton’s lawyers had argued that he should get probation, arguing that any misstatements resulted from his “deeply-held optimism” in his Phoenix-based company.
According to CBS, Milton delivered a tear-filled and rambling 30-miunute justification, describing his actions as “heroic”, said he only stood down from the company to care for his dying wife, but refused to apologise to investors.
Ramos was not convinced.
“The law does not grant a pass for good intentions,” Ramos told the court on Monday, the Reuters report says. Milton was convicted of one count of securities fraud and two counts of wire fraud, and Nikola in 2021 agreed to pay $US125 million to settle civil charges brought by the US Securities and Exchange Commission.
Milton intends to appeal the case, and says he is confident he can win.” I think it’s going to be overturned,” he told reporters as he left the court, CBS reports.
The company’s shares now trade for less than $US1, down from a peak of higher than $US60 in June 2020.