Nikola founder Trevor Milton seeks probation after fraud conviction

Trevor Milton, founder and former-CEO of Nikola Corp., exits court in New York City

By Jonathan Stempel

NEW YORK (Reuters) - Trevor Milton, the convicted founder of electric- and hydrogen-powered truck maker Nikola, is seeking to avoid prison, with his lawyers saying his case differed from that of Theranos' Elizabeth Holmes, another startup founder convicted of fraud.

Milton, 41, had been found guilty by a federal jury in Manhattan in October 2022 on two counts of wire fraud and one count of securities fraud, after prosecutors branded him a "con man" who lied to investors about Nikola's technology.

Prosecutors said Milton's improper statements included that Nikola had built a pickup from the "ground up," developed batteries he knew it was buying elsewhere, and had early success creating a "Nikola One" semi-truck he knew did not work.

In a Tuesday night court filing, lawyers for Milton said he should get probation at his Nov. 28 sentencing, in part to care for his ailing wife.

The lawyers said there was "not a shred of evidence" that Milton had ill intent, and any misstatements resulted from his "deeply-held optimism and belief" in his Phoenix-based company.

Milton had been a frequent user of Twitter, and often appeared on television and podcasts.

"Trevor has his faults, but if he is made aware of them, he will make the effort to correct them," the filing said.

The lawyers distinguished Holmes' case by saying Theranos, which promised to run many medical tests on one blood drop from a finger prick, was not a "real company with real products," and that Holmes' lies put people at medical risk.

Holmes is serving an 11-1/4-year prison term, which she is appealing. She had sought 18 months of home confinement.

The office of U.S. Attorney Damian Williams in Manhattan is expected to submit its own sentencing recommendation.

Probation officers calculated that Milton deserves 17-1/2 to nearly 22 years in prison under federal sentencing guidelines, which are advisory and judges need not follow. Milton's lawyers said the range should be 12 to 18 months.

Nikola shares trade near $1, giving the company a $1.1 billion market value. That value peaked above $30 billion in June 2020.

The case is U.S. v. Milton, U.S. District Court, Southern District of New York, No. 21-cr-00378.

(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)