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 US District Court in Manhattan, caps a years-long saga that at one point saw Nikola’s stock soar 83% only to collapse months later amid allegations of fraud and voided contracts.
The sentencing hearing comes after four separate delays, during which Milton remained free on $100 million bail.
In his ruling, Ramos said he would impose a 48-month sentence on each count, to be served concurrently, and a $1 million fine. Milton is expected to appeal the sentence, which Ramos acknowledged.
Milton sobbed as he begged Judge Ramos for leniency in a lengthy and often rambling pre-sentence statement. At one point, Milton said he resigned as CEO at Nikola not because of fraud allegations, but to support his wife.
“I resigned because my wife was suffering from a life-threatening illness,” he said in his statement, which Inner City Press reporter Matthew Russell Lee shared in X’s social media post. He suffered a medical error, someone else’s creature. So I quit for that – not because I was a cheater. 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 pleading guilty to lying to investors about Nikola’s development of electric trucks in order to inflate the company’s stock price .
During the sentencing hearing, defense attorneys said Milton was not trying to defraud investors or intended to harm anyone. Instead, they argued, he just 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 of 60 years in prison. The government also sought a $5 million fine, forfeiture of a ranch in Utah and an unspecified amount of restitution to investors. Restitution will be determined after Monday’s sentencing hearing.
Prosecutors in the case accused Milton of defrauding investors since 2019 by making improper statements, including that Nikola had built a truck from scratch and developed batteries that were actually purchased elsewhere. There’s also Nikola’s infamous marketing video showing a truck moving under its own power. He was actually going down a hill.
That video sparked third-party investigations, and after a report by Hindenburg Research called the company a fraud, Milton resigned in September 2020. The company eventually paid a $125 million fine in a settlement with the US Securities and Exchange Commission. Nikolas’ stock collapsed, resulting in serious losses for the investors, as well as the company.
Nicola ended up seeking damages in the SEC settlement and a 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 insisted there was no evidence the former CEO intended to defraud investors. Any inaccuracies were the result of optimism and faith in the company, they said. Last month, Milton’s lawyers said he will have to go on probation, in part to take care of his sick wife.
Milton’s conviction is one of the few high-profile cases involving tech founders. Elizabeth Holmes, the founder of Theranos, is serving an 11-year prison sentence after being found guilty of defrauding investors in her blood-testing startup. Sam Bankman-Fried, founder of crypto exchange FTX and cryptocurrency trading firm Alameda Research, pleaded guilty in November to seven counts of fraud and money laundering.
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