Milton faces up to 20 years of prison for just one of his counts of fraud.
In June 2020, Nikola went public with a $26.3 billion evaluation. Two months later, it was accused of fraud by Hindenburg Research.
We spent the next several years learning about all the different varieties of snake oil the company's founder, Trevor Milton, was peddling. Recently, we learned that the brand's crown jewel, the Badger, was built with F-150 Raptor parts.
Now, Nikola founder Trevor Milton has been found guilty of defrauding investors. The 40-year-old ex-founder was found guilty of one count of securities fraud and two counts of wire fraud by a Manhattan federal Jury. As a result, Milton could be headed to prison.
If you remember, Milton's company was at one point compared with Tesla, and the founder even tried to sue the brand for the design of its competing semi-truck. Assistant US Attorney Jordan Estes said the company was "lie after lie." Nikola worked hard to build credibility through celebrity endorsements and social media. The brand even had the Diesel Brothers endorsing its Badger truck.
"His lies may have been on social media," said the opposing council, "but make no mistake: This was an old-fashioned fraud." Per Bloomberg, Milton's own council said the entire trial was "prosecution by distortion," alleging that Milton didn't mean to deceive anyone. On top of that, the team said his statements weren't significant enough to influence decisions made by investors.
Under federal law, securities fraud is a Class C felony. It is punishable by up to 20 years in prison, three years of supervised release, and $5 million in fines. Wire fraud is also Class C, punishable by up to 20 years in prison, three years of supervised release, and $250,000 in fines.
Milton's wealth has declined rapidly since the company shattered, though his net worth is still valued in the hundreds of millions. At one point, Milton's net worth was estimated to be roughly $3.1 billion.
Milton's defense attorney asked the jury to consider that his life "hung in the balance" before the verdict was given. Federal prosecutors called 12 witnesses to Milton's trial. Milton must still go through motions after the verdict, judgments, sentencing, and, if he wishes, appeals.