Nicholas founder Trevor Melton has been charged with fraud over false allegations about electric/hydrogen trucks

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Trevor Melton, founder and former CEO of Nikola, a company that makes electric trucks and fuel cells, has been indicted by a grand jury on three counts of criminal fraud over false allegations about the company.

Milton became a billionaire after Nikola went public with the SPAC deal, and the stock price soared as the CEO made several claims about the company’s progress toward bringing its electric trucks and fuel cells to market.

Last year, Nikola was in a hot spot after a report by Hindenburg Research made several allegations debunking Nikola and its founder Trevor Melton, including several claims confirmed by previous reports from Electrek and Bloomberg.

Nicola issued a response to these allegations, but as we have been informed, the response lacked any refutation of the main allegations of fraud by the company and its founder Milton.

For the most damning, the claim that it faked the first video of it driving its hydrogen truck, the company admitted it without issuing an apology and instead claimed that its deception was fine due to a technical reason.

Milton ended up leaving the company as pressure began to build.

The founder has been rumored to be under a federal fraud investigation since Nicola was exposed in September of 2020.

After Melton left the company, he sold millions of shares worth, which he used to purchase a luxury mansion in Utah, and he still holds a large sum, often worth billions of dollars depending on the volatile stock price.

The company continued to experience problems.

General Motors canceled a deal to build a Nikola and Hydrogen pickup truck, and the company ended up returning deposits to booking holders.

Now, Melton has to face the music as the US Attorney’s Office for the Southern District of New York announced that it is charging him with three counts of criminal fraud at a press conference today:

Prosecutors note the indictment:

“The Milton scheme targeted individual and non-professional investors — so-called retail investors — by making false and misleading statements directly to the investing public through social media, television, print interviews, and podcasts.”

According to the US Attorney’s Office, Melton has surrendered to authorities, and is supposed to appear in court later today.

The US attorney general said Milton specifically lied by exaggerating the Nikola and hydrogen battery technology, the level of engineering the company completed on prototypes, and the number of orders it had received.

The plaintiffs argued that the fraudulent allegations were motivated by “to enrich himself and raise his profile as an entrepreneur”.

Milton would lose all fraud-related property, which would include all of his Nikola shares and the money received from the sale of those shares, which represented most of his fortune.

Take Electric

My quick reaction to this news was: “Ha! You’re getting what you deserve.” But honestly, it came more from a selfish point of view as I had my issues with Milton.

I’ve been a critic of Nicolas over the years, and Milton went swearing with me, claiming that the only reason I was criticizing the company was because I was a “shell of Elon Musk”.

When he participated in the Tesla Third Row podcast, he even “linked” to Omar Qazi, a Tesla fan known for making false claims, about how they thought I was “douche”:

If I step back from my personal issues with Milton and think more rationally about his indictment, and hopefully be indicted, I think it would be a positive for the EV investment space.

Although not condemned, this is a step in the right direction and, in the end, will be good for the electric car industry.

The EV SPAC craze has created a very annoying investment space for electric vehicle projects, and this attracts scammers.

The space is now full of companies making big claims, and I think now people will be more careful about which companies they should take seriously, and on the other hand, these companies will be more careful about the claims they make knowing that. There are repercussions.

But I also see people collecting all EV SPAC companies in the same “scam basket” and I don’t think that’s fair either.

There are many legitimate electric car companies that have been opportunistic in raising money through SPAC deals.

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