Nikola founder Trevor Milton faces new fraud charge

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NEW YORK (Reuters) – U.S. prosecutors on Wednesday added a new wire fraud charge to their criminal case accusing Trevor Milton, founder and former chief executive of Nikola Corp, of defrauding investors by lying about the electric truck maker and to hydrogen.

The new charge relates to Milton’s alleged efforts to defraud the vendor of Wasatch Creeks Ranch in Utah by making false and misleading statements about Nikola’s products and business prospects.

Milton previously pleaded not guilty to two counts of securities fraud and one count of wire fraud relating to statements he made from November 2019 to September 2020. He faces trial before jury scheduled for July 18 in Manhattan federal court.

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Milton’s attorneys did not immediately respond to requests for comment.

The new fraud charge relates to Milton’s purchase of the Wasatch Creeks Ranch from a Massachusetts man, who said he accepted Nikola’s stock options as part of the purchase price based on claims by Milton regarding society.

In a civil complaint filed March 14 in federal court in Utah, the seller said the value of the options was “destroyed” when Milton’s alleged lies became known and Nikola’s stock price dropped. The lawsuit claims $45 million.

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Milton’s criminal case is one of the largest involving a company that went public after merging with a special purpose acquisition company, or SPAC.

Critics say the process is prone to conflicts of interest and shoddy due diligence.

Nikola went public in June 2020. Authorities said Milton misled investors in social media posts, television appearances and podcast interviews designed to drive up Nikola’s stock price. and strengthen its entrepreneurial stature.

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In December, Nikola agreed to pay $125 million to settle a civil fraud case related to the United States Securities and Exchange Commission.

Nikola has neither admitted nor denied the SEC charges. The SEC also charged Milton with civil fraud.

On Monday, Milton, a former billionaire according to TAUT magazine, asked the judge in his criminal case not to let jurors hear evidence about his wealth, lifestyle and spending habits, saying it would be unfairly prejudicial.

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