Nikola Founder Accused of Fraud in Trial’s Opening
NEW YORK (AP) — A prosecutor accused the founder of a company that claimed it built zero-emission trucks of lying to investors to make himself a billionaire, but his lawyer insisted Tuesday in opening statements of a fraud trial that his client was an enthusiastic visionary being unjustly prosecuted.
In Manhattan, federal court jurors were presented with two different portrayals of Nikola Corp. founder Trevor Milton at the beginning of the introduction of evidence in a case that was set to last for over a year.
In 2020, Nikola’s stock price plunged and investors suffered heavy losses as reports questioned Milton’s claims that the company had already produced zero-emission 18-wheel trucks fueled by hydrogen gas.
Milton, aged 40, pleaded guilty to wire and securities fraud. He faces trial after resigning as a director of the company Assistant U.S. attorney Nicolas Roos claimed was founded in his Utah basement six-years ago.
“This is Trevor Milton and he committed fraud,” Roos said. “He repeatedly lied to investors about his company and he made a billion dollars by doing so.”
Marc Mukasey, a defense attorney, reminded jurors of his client’s innocence.
“There is no crime here,” Mukasey said. “Trevor Milton did not intend to defraud or deceive anyone.”
The defense lawyer said Milton’s intentions were distorted by prosecutors to create their case.
“Trevor Milton is not guilty,” he said flatly.
To settle the civil case brought by the Securities and Exchange Commission against Nikola, the company spent $125million last year. Nikola, which continues to operate from an Arizona headquarters, didn’t admit any wrongdoing.
The company has started delivering vehicles to customers. It is now ramping up towards a production capacity of thousands of trucks annually.
In his opening, Roos promised that witnesses would show that Milton was committing fraud when he staged an “unveiling” of what he described as a fully functioning truck that was actually missing major parts like gears and motors and that had to be plugged into a wall’s electrical socket to turn on its lights.
Milton later said the key parts were kept out of the truck at the event for safety reasons so that nobody would drive it off the stage and so prospective customers could view parts at the stage’s side.
Roos said Milton “doubled down” with the fraud a year later when a video was released that showed the truck supposedly operating when it was really just rolling down a hill.
Milton worsened the fraud by promoting the truck on social media and booking himself on mainstream television and podcasts, “flooding the airwaves with false and misleading things,” he said.
Roos also claimed Milton was lying when he stated that billions of dollars had been ordered.
In reality, the prosecutor said, 95% of the reservations were “just expressions of interest, but were reservations that could be canceled at any time.”
The trial’s first witness, engineer Paul Lackey, said he was a bright-eyed idealist when he worked on the truck, but he became disheartened during a car ride once when Milton said he didn’t really care about the environment.
“I just want to make money,” he recalled Milton saying.
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