Nikola founder faces federal charges
29 July 2021
The founder and former CEO of electric truck manufacturer Nikola Corp. is facing criminal charges for securities and wire fraud in connection with what prosecutors called a scheme to defraud and mislead investors about the development of Nikola’s products and technology.
Trevor Milton, 39, of Oakley, Utah, is charged with two counts of securities fraud and one count of wire fraud. The securities fraud counts carry maximum penalties of 20 and 25 years in prison, respectively. The wire fraud count carries a maximum penalty of 20 years in prison. Milton has surrendered to authorities.

“As alleged, Trevor Milton brazenly and repeatedly used social media, and appearances and interviews on television, podcasts, and in print, to make false and misleading claims about the status of Nikola’s trucks and technology,” said Manhattan U.S. Attorney Audrey Strauss said as the indictment was unsealed. “But today’s criminal charges against Milton are where the rubber meets the road, and he now will be held accountable for his allegedly false and misleading statements to investors.”
According to the allegations in the Indictment unsealed in Manhattan federal court, from November 2019 to September 2020, defrauded investors by inducing them to purchase shares of Nikola through false and misleading statements regarding Nikola’s product and technology development.
The government alleges that Milton made false claims regarding nearly all aspects of Nikola’s business, including:
- That the company had early success in creating a “fully functioning” semi-truck prototype known as the Nikola One, when Milton knew the prototype was inoperable. Rather, the prototype was wholly missing significant parts, including gears and motors, and the control system was incomplete, the government said. Later, Milton published a video in which the Nikola One appeared to be driving on its own power down a road with no incline. In fact, to film these clips, the Nikola One was towed to the top of hill, at which point the “driver” released the brakes, and the truck rolled down the hill until being brought to a stop in front of a stop sign.

- That Nikola had engineered and built an electric- and hydrogen-powered pickup truck known as “the Badger” from the “ground up” using Nikola’s parts and technology. The indictment said that Nikola purchased several Ford F-150 pickup trucks to use as “donor” or “surrogate” vehicles, and used the vehicles’ chasses and bodies as the base for constructing the Badger prototypes.
- That Nikola was producing hydrogen and was doing so at a reduced cost. In fact, the government said Nikola never obtained a permit to produce hydrogen or installed the equipment necessary to produce hydrogen and at the time Milton was claiming that Nikola was producing hydrogen for less than $4 per kg, it was in fact purchasing hydrogen from a supplier for $16 per kg.
- That Nikola had developed batteries and other important components in-house, when in reality Nikola was acquiring those parts from third parties. Although Nikola partnered with various companies to try to develop proprietary battery technology, these efforts were not successful and Nikola has not successfully developed technology internally. The batteries it has planned to use in its semi-trucks were developed and manufactured by third parties.
- That claims that reservations made for the future delivery of Nikola’s semi-trucks were binding orders representing billions in revenue, when the vast majority of those orders could be cancelled at any time or were for a truck Nikola had no intent to produce in the near-term.
The government also said that Milton took advantage of the fact that Nikola went public by merging with a Special Purpose Acquisition Company (SPAC) rather than through a traditional IPO, by making many of his false and misleading claims during a period where he would have not been allowed to make public statements under rules that govern IPOs.
The announcement of the indictment by the U.S. Attorney’s office for the Southern District of New York is available here.
A copy of the full indictment itself can be viewed here.
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