New York City, NY

Billionaire start-up founder charged with lying in New York City

Tara Blair Ball

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Start-ups are notorousily volatile companies to invest in, but one founder of an electric and hydrogen-powered truck startup outright lied and manipulated to procure money from investors. As a result, amateur investors lost millions of dollars. He's now being prosecuted in New York City court.

Trevor Milton, founder of Nikola, reported that his company had developed eco-friendly long-haul trucks in 2016. He said that one prototype "fully functions and works, which is really incredible.”

That was a complete falsehood, prosecutors say. At the time, "the prototype still lacked gears, motors and a control system." In 2018, a video was released of Nikola One, the supposed prototype, traveling on a flat road. "But the truck...was allegedly towed to the top of a hill, where a driver released the brakes."

Milton also promoted an electric pickup truck called the Badger, alleging that the truck was all of their making. In actuality, the prototype was made using several Ford F-150 pickup trucks.

New York City attorney Audrey Strauss said, "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... 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."

Milton's videos of his company's technology were popularized across multiple social media platforms, which encouraged investors, usually amateur investors, to invest in what, they believed, to be the "next Tesla."

Milton's claims came under question in September 2020, and the Nikola stock then tanked. Those amateur investors then lost millions in investments. Some had cashed out their retirement accounts and invested, truly believing that they'd see marked returns when Nikola cars hit the road.
Unfortunately, they never will because Nikola's magical electric and eco-friendly vehicles were possibly never able to begin with.
Milton pled not guilty in a New York Federal Court and was released on a $100 million bail. He was able to do so by securing two of his properties in Utah, one valued at $36 million.
This billionaire potentially made so much money off the hopes and dreams of novice investors by purposefully manipulating them through carefully created videos and spoken falsehoods.
Thankfully, he may now be punished. But Milton's legal team says differently. One member of his legal team said, “This is a new low in the government’s efforts to criminalize lawful business conduct. Every executive in America should be horrified.”
If the allegations are true, Milton will certainly pay the price. The poor investors, though, may never get their money back.

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