Founder of Nikola Corp., Trevor Milton, was sentenced to four years in prison on Monday for exaggerating claims about his company's production of zero-emission 18-wheel trucks, resulting in significant financial losses for investors. Judge Edgardo Ramos delivered the sentence in Manhattan federal court, affirming the jury's conviction of Milton in October 2022. In addition to the prison term, Milton was ordered to pay a $1 million fine. Judge Ramos criticized Milton's use of social media to promote false information about the company, causing investors to suffer heavy losses. He stated, "What you said over and over on different media outlets was wrong."

The case against Milton stemmed from a report released by Hindenburg Research in September 2020, which referred to Nikola's success as an "intricate fraud" built on a foundation of lies. The report highlighted deceptive tactics used by the company, including showing a truck rolling downhill to create the illusion of highway cruising and labeling a vehicle powered by natural gas as "hydrogen electric." Following the release of the report, Milton resigned from his position just two weeks after signing a $2 billion partnership deal with General Motors. In a message to Nikola employees, Milton claimed that his decision to step aside was to shift the focus back to the company's mission and distance himself from the allegations of fraud.

Before the sentencing, Milton gave a rambling statement, at times tearful, defending his actions at Nikola and painting himself as a hero in the pursuit of environmentally friendly trucks. He argued that other industry leaders had followed his lead in developing cleaner vehicles. However, Milton did not apologize directly to investors or anyone impacted by his actions. He pleaded with the judge to spare him from prison, expressing remorse for the resources and time wasted but maintaining that his intentions were not to harm others. Milton stated, "My intent was not to harm others."

During the trial, Nikola's CEO testified as a government witness, describing Milton as prone to exaggeration when pitching the venture to investors. Assistant U.S. Attorney Matthew Podolsky argued for a significant prison sentence, highlighting Milton's influence over a large number of people through his social media statements. While federal sentencing guidelines recommended more than 27 years in prison, Podolsky did not specify a specific term. Defense attorney Marc Mukasey, on the other hand, pleaded for no prison time, pointing out the immense suffering Milton had already endured due to ongoing lawsuits and a pending case with the Securities and Exchange Commission. Mukasey emphasized that Milton's ability to work was crucial to his well-being.

Following the sentencing, Milton expressed confidence in winning his appeal against the conviction. He highlighted potential problems in the case that were outlined in the appeal and believed they would result in the conviction being overturned.

Milton's resignation in 2020, amid fraud allegations, had a detrimental impact on Nikola's stock prices, causing significant losses for investors. The company eventually settled a civil case with the SEC, agreeing to pay $125 million. Despite the legal challenges, Nikola continues its operations from its Arizona headquarters, maintaining that it did not admit any wrongdoing.

Prosecutors argued that Milton made false claims about Nikola, including fabricating claims about building their own trucks and developing their own batteries when they were purchasing them from another company. They also presented evidence of videos being manipulated to hide flaws in the trucks. The jury found Milton guilty of lying to investors about the company's technology, resulting in his conviction on one count of securities fraud and two counts of wire fraud. He was acquitted on an additional securities fraud count.