(Bloomberg) — Founder Nicola Trevor Melton was convicted of fraud for misleading investors in the electric truck company, the stunning collapse of a door-to-door salesman-turned-billionaire who promised to revolutionize the auto industry.

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Milton, 40, was indicted Friday on two counts of securities fraud and two counts of electronic fraud by a federal jury in Manhattan, boosting the US Department of Justice’s efforts to crack down on corporate crime. He was acquitted of the most serious securities fraud charge, but still faces up to 20 years in prison.

Read more: Melton described as a serial liar, and the victim of a distorted case, in shutdown

He shook his head briefly as the verdict was read, raised his left hand over his face and looked at the nearly twenty family members and friends huddled in the seats behind him.

“I think the evidence was clear,” said juror No. 5, a gray-haired, bespectacled woman. She refused to give her name.

Boarding

Milton is due to be sentenced on January 27.

“I did nothing wrong,” Milton said outside the courtroom. “I was talking about a business plan.”

When asked about his plans, he said, “I have to keep fighting. That’s all you can do, especially when you’re not doing anything.”

Read more: Nicola’s CEO says he learned the truck didn’t have power until after he was hired

It was a wild ride for the charismatic entrepreneur, whose fortune plummeted to hundreds of millions of dollars after it once reached billions shortly after the company listed its shares in June 2020. Milton, who remains the company’s largest single shareholder, founded Nicola in 2014 and its building into a company that was worth $34 billion when it went public, more than Ford Motor Company at some point.

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The skyrocketing rise of the startup, which had no revenue at the time, came amid a wave of electric car companies going public through Special Purpose Acquisitions, or SPACs, that began two years ago as investors scoured the scene for Tesla Inc. . Going the SPAC route allowed them to market their companies based on future performance expectations rather than actual financial results. Some of the biggest names on Wall Street have poured money into the sector.

Celebrity endorsements

After Nikola’s inclusion, mainstream investors started noticing Milton’s vision as well, with the company being discussed as often online as was the case with Elon Musk. While Nikola’s initial focus was on heavy commercial trucks, he made plans to expand to run sports and consumer electric vehicles. It was all bolstered by celebrity endorsements like the Diesel Brothers’ Heavy D, who promoted the Badger Pickup, a product that never made it past the rendering stage.

Read more: Nikola’s founder exaggerated the capacity of his first truck

Prosecutors argued that Milton lured retail investors to buy Nikola’s stock by making false statements about the company’s products and capabilities in numerous tweets, media interviews, and podcasts, greatly exaggerating Nikola’s ability to manufacture hydrogen fuel cell trucks in addition to its ability to produce the fuel itself.

Assistant US Attorney Jordan Estes told the jury in her closing arguments Thursday that it was “a lie after a lie.” “Maybe it was his lies on social media, but make no mistake: This was an old scam.”

Read more: Nicholas whistleblowers told their side about Trevor Milton Saga

Milton’s lawyers described the case as a “litigation by distortion,” claiming that their client never intended to deceive potential investors and that, in any event, his statements were not material or significant enough to influence those investors’ decisions.

Milton was generally upbeat when he arrived at court in a suit and tie to sit down with his attorney. Concluding his talk, which made Milton’s wife weep, Mukasey asked the jury to “imagine the nightmare for Trevor, aged 40, to hang his life on the scales” due to an overzealous pursuit.

There were lighter moments, too. In a tense vigil during Friday’s jury deliberations, Mukasey did some practice on a golf swing with a mock club.

Nicola said he was “pleased to close this chapter” over statements Melton made years ago, and added that “neither the plaintiffs nor Mr.

Damian Williams, the US attorney general for Manhattan, said the case is “a warning to anyone who quickly manipulates the truth to persuade investors to part with their money.”

During the trial, which began with opening statements on September 13, the government called dozens of witnesses. It all started with Paul Lackey, a former contractor with Nicholas Inc. The fraud allegations helped spur a criminal investigation.

Lucky, an engineer with electric propulsion systems company EVDrive, said he gave Nate Anderson’s Hindenburg Research information in exchange for a share of its profits from the company’s short sale. The seller’s September 2020 short report described Nikola as a “complex fraud” who, among other allegations, exaggerated the capabilities of his first test trucks. Nikola shares plummeted.

The government summoned the other insiders of Nikola to the witness stand. between them:

• Brendan Papiers, former designer of Nicholas who said a prototype of the Badger pickup truck planned to start the electric vehicle was made in part from components from the Ford F-150 Raptor

• CEO Mark Russell, who said he only learned after joining the company that his first electric truck had neither a natural gas turbine nor a fuel cell when Milton revealed it

• Chief Financial Officer Kim Brady, who said Milton was so focused on the company’s stock price that when shares fell $5 on the first day of trading, he thought something was wrong with the Nasdaq

The defense contacted Harvard Law School professor Allen Ferrell, an expert on economics and the stock market, who told the jury that traders mostly ignored Milton’s remarks between the time his company was announced and the time he resigned.

The case is United States v. Melton, 21-cr-478, US District Court, Southern District of New York (Manhattan).

Read more

• Nicola Investor Lost $160,000 In Milton Hype, Tells Jury

• Nicholas saw Badger’s losses as “enormous” but supported Milton anyway

• Trevor Melton faces the jury on his toughest sales job yet

• Nicola Trevor Melton founder will not testify in fraud trial

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