Judge rejects Nikola founder’s bid to dismiss or move U.S. criminal fraud case

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NEW YORK (Businesshala) – A US judge on Monday refused to dismiss a federal indictment against Nikola Corp’s billionaire founder Trevor Milton for defrauding investors about the electric and hydrogen-powered truck maker’s technology.

FILE PHOTO: Trevor Milton, founder and ex-CEO of Nikola Corp., exits the Manhattan Federal Courthouse after an appearance in New York City, US, July 29, 2021. Businesshala / Eduardo Munoz

U.S. District Judge Edgardo Ramos dismissed Milton’s claim that he should not have been prosecuted for securities fraud and wire fraud in New York because his alleged lies were in Arizona and Utah, where he lived, and the case was there. Was.

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A Manhattan-based judge said Milton, 39, could be prosecuted in New York if he traded Nikola stock on the Nasdaq and made a false statement to that state.

Ramos said other factors also supported keeping the case in New York despite Milton’s desire to care for his wife at home, who according to court papers has an autoimmune disorder and other “serious” health problems.

Milton’s lawyers did not immediately respond to requests for comment. He has called the indictment “legally flawed” and plans to seek dismissal on basic grounds.

Nicola has not been charged with wrongdoing.

Officials said Milton used social media posts and TV and podcast interviews to prop up Nikola’s share price over nearly a year.

Prosecutors said they incorrectly claimed that Nikola built an electric- and hydrogen-powered pickup from the “ground up”, developed batteries it knew it was buying elsewhere, and on a truck prototype. was making progress he knew didn’t work.

Milton founded Phoenix-based Nikola in 2014 and was chief executive until June 2020, when it went public following a merger with a special-purpose acquisition company (SPAC).

SPACs, a booming market, are investment vehicles that allow sponsors to go public with private companies faster than initial public offerings, but which critics say are prone to conflicts of interest and poor due diligence.

Nikola and other vehicle startups have used SPAC to command high market valuations, such as Elon Musk’s Tesla Inc.

Prosecutors are also investigating electric truck maker Lordstown Motors Corp.’s statements about SPAC and vehicle pre-orders.

The case is in US v Milton, US District Court, Southern District of New York, No. 21-crore-00478.

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