Nikola founder Trevor Milton should receive around 11 years in prison for defrauding investors in the electric- and hydrogen-powered truck maker, prosecutors in New York said on Tuesday.
Milton was convicted at trial in October 2022 on two counts of wire fraud and one count of securities fraud. Prosecutors said Milton targeted retail investors with false claims about Nikola’s technology starting in 2019.
He is scheduled to be sentenced on Dec. 18 at a hearing where investors may appear to speak about their losses on the company, whose market cap soared to above USD 30 billion in June 2020.
Prosecutors on Tuesday asked U.S. District Judge Edgardo Ramos to give Milton a “substantial sentence” in line with an 11-year recommendation from the probation department.
They compared Milton to Theranos founder Elizabeth Holmes, who was sentenced to more than 11 years in prison last year for defrauding investors in her blood testing startup.
“Just as Holmes lied about Theranos-manufactured blood analyzers, Milton lied about the operability of the Nikola One semitruck,” they said.
Milton has urged the judge to resist comparing him to Holmes, saying Nikola is a “real company with real products,” unlike Theranos. He has asked for probation, saying his statements came from a “deeply-held optimism” in the company he founded in 2014.
Prosecutors said at trial that Milton used social media and news-media interviews to make false and misleading claims, including that Nikola built an electric- and hydrogen-powered “Badger” pickup from the “ground up.”
