Trevor Milton, the founder and former CEO of electric truck startup Nikola, has been sentenced to four years in prison for securities fraud. The sentencing, presided over by Judge Edgardo Ramos in the U.S. District Court in Manhattan, marks the culmination of a multi-year saga that initially saw Nikola’s stock surge by 83% and later dropped due to allegations of fraud and canceled contracts.
The sentencing follows four delays, during which Milton remained free under a $100 million bond. Judge Ramos imposed a 48-month sentence on each count, served concurrently, along with a $1 million fine. Milton is expected to appeal the sentence.
During the emotional hearing, Milton, visibly upset, pleaded with Judge Ramos for leniency. He claimed to have stepped down from the CEO role, not due to fraud allegations but to support his wife, who was battling a life-threatening illness caused by medical malpractice. Milton emphasized that he prioritized his family over money or power.
Milton, aged 41, was convicted in October 2022 on one count of securities fraud and two counts of wire fraud. The charges stemmed from his deceptive practices of lying to investors about Nikola’s electric truck development to artificially inflate the company’s stock price.
Defense attorneys argued during the sentencing hearing that Milton did not intend to harm investors and only sought approval akin to Elon Musk’s. Prosecutors countered, asserting that Milton had repeatedly lied, specifically targeting retail investors.
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While federal prosecutors recommended an 11-year sentence, Milton faced a maximum term of 60 years in prison. The government also sought a $5 million fine, forfeiture of a Utah ranch, and restitution to investors—an amount yet to be determined.
Prosecutors accused Milton of deceiving investors since 2019 with false statements, including claims that Nikola had independently developed a truck and batteries when, in reality, they were purchased from elsewhere. The infamous Nikola marketing video showing a truck appearing to drive autonomously, later revealed to be rolling down a hill, triggered investigations and contributed to the company’s downfall.
Following allegations by Hindenburg Research and Milton’s resignation in September 2020, Nikola settled with the U.S. Securities and Exchange Commission for a $125 million penalty. The company’s stock collapse resulted in significant losses for investors.
In October, an arbitration panel ordered Milton to pay Nikola $165 million as reimbursement for the SEC settlement and fine. Throughout the legal proceedings, Milton maintained his innocence, with his lawyers insisting there was no evidence of intentional fraud. Last month, they argued for probation, citing Milton’s responsibility to care for his ailing wife.
Trevor Milton’s sentencing adds to the shortlist of high-profile cases involving tech founders, including Elizabeth Holmes, founder of Theranos, and Sam Bankman-Fried, founder of FTX and Alameda Research, both facing legal consequences for fraud-related charges.
