Nikola founder faces new fraud charge

On Behalf of | Jul 18, 2022 | Federal Crimes

Trevor Milton, the founder and former CEO of Nikola, a purported maker of electric and hydrogen-powered vehicles, is facing a number of federal fraud charges stemming from alleged misstatements about the value of the company. Federal authorities have now added another charge based on Milton’s use of Nikola stock to pay a portion of the purchase price on a Utah ranch.

The allegations

According to the new indictment, Milton offered Nikola stock options to pay a portion of the purchase price on the Wasatch Creeks Ranch in Utah; in support of the offer, Milton is charged with making false and misleading statements about Nikola’s products and business prospects.

Milton had previously pleaded innocent to two charges of securities fraud and one count of making fraudulent wire statements. Milton is scheduled to be tried on these issues in Manhattan federal court in July of 2022.

The Massachusetts man who is the source of the latest charges said that Milton made a number of fraudulent claims about the value of the company’s stock. As Milton’s misrepresentations became known, the value of the company’s stock declined sharply, reducing the value of the Nikola stock options to almost nothing.

The seller of the Utah ranch has commenced a civil action against Milton, seeking $45 million in damages.

Milton’s other charges

Nikola’s stock became publicly traded in June of 2020. Authorities have accused Milton of lying about the company’s value in a podcast interview, TV appearances, and social media posts. Milton is also charged with using these appearances and his false statements to bolster his reputation as an entrepreneur.

Milton’s attorneys recently asked the court to exclude evidence of his wealth and opulent lifestyle and spending habits, arguing that such evidence would be prejudicial and likely to mislead the jury. The court has not yet ruled on the motion.

Legal advice from a knowledgeable attorney

Anyone facing similar accusations may wish to consult an experienced criminal defense attorney for an analysis of the evidence, potential defense strategies, and advice o the likelihood of a favorable verdict or plea agreement.