Founder Nicola Trevor Melton faces a new federal fraud charge linked to the purchase of a farm

US Nikola CEO and founder Trevor Melton speaks during a presentation of his new electric, battery-powered hydrogen fuel cell truck in partnership with CNH Industrial, at an event in Turin, Italy on December 2, 2019.

Massimo Pinca | Reuters

Founder of Electric Truck Startup Nikola Motorswho has already been indicted for fraud, faces a new charge related to his purchase of a farm in Utah — a transaction he paid for in part with an option to purchase Nikola’s stock.

Federal prosecutors in the Southern District of New York on Wednesday indicted Trevor Melton with a new electronic fraud charge for misrepresenting the state of Nicholas’ business to persuade a Wasatch Creek farm seller to accept an option to purchase Nikola shares as partial payment to the farm around April 2020.

The new count is the fourth federal charge against Milton. In July 2021, a federal grand jury indicted Melton on three counts of criminal fraud for allegedly lying about “nearly all aspects of the business” to boost sales of the electric car company’s stock.

The Nicholas stock option would have allowed the farm seller, Peter Hicks, to buy more than 500,000 shares of the company at a discounted price of $16.50 per share.

Nicola’s stock price briefly rose to more than $60 in June 2020, but fell sharply after Melton was forced out of the company amid allegations of fraud in September of that year. The company’s shares were trading at $5.60 late Wednesday.

Milton’s lawyers did not immediately respond to a request for comment.

Prosecutors said Melton built a complex scheme designed to increase the company’s stock for his own gain by lying about Nikola’s products, technology and future sales prospects. They accuse him of using Nikola’s deal to advertise a special purpose buyout company to target amateur retail investors, some of whom have lost hundreds of thousands of dollars.

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In his civil suit against Milton, Hicks alleged that Milton made similar assertions to persuade him to accept a stock option to pay for the farm.

Several allegations of false and misleading Milton’s statements were first exposed by short-selling firm Hindenburg Research.

Milton, still awaiting trial, maintained his innocence. He pleaded not guilty to the criminal charges in a New York courtroom last year.

However, after an internal investigation, Nicola said in February he had discovered that Milton had made several inaccurate statements from 2016 through the company’s initial public offering that misled investors in June 2020.

In December, Nikola agreed to pay $125 million to the Securities and Exchange Commission to settle charges that had occupied investors by misleading them about its products, technical capability, and business prospects.

Nicholas was the catalyst to start going public with electric cars through SPAC deals. Investor interest in such companies soared after Tesla Corp.’s shares jumped to become the world’s most valuable automaker by market capitalization in 2020.

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