US officials on Thursday charged Nikola founder and former executive chairman Trevor Milton with "brazenly" defrauding investors through a litany of false claims about the company's electric vehicles.

"In order to drive investor demand for Nikola's stock, Milton lied about nearly every aspect of the business," said US Attorney for the Southern District of New York Audrey Strauss at a news conference held after her office released a 49-page indictment of Milton on three counts of fraud.

"Milton brazenly and repeatedly made false and misleading claims about the status of Nikola technology," she said.

Milton, who resigned in September of last year, allegedly claimed that Nikola had built a "full-functioning" semi-truck prototype when Milton "knew that the prototype was inoperable," according to the indictment.

He made these and other false claims to "induce retail investors to purchase Nikola's stock," the indictment said.

When Milton's statements were shown to be false, shareholders, including some with little prior investing experience, "suffered tens and even hundreds of thousands of dollars in losses, including, in certain cases, the loss of their retirement savings or funds that they had borrowed to invest in Nikola," said the indictment.

Milton was taken into custody early Thursday and released after a court hearing on a $100 million bond secured by two properties, US officials said.

Strauss said false claims occurred between November 2019, when Milton took steps to take Nikola public, and September 2020, when he left the company.

During this period, Milton became "increasingly preoccupied" with keeping Nikola's stock price high, enabling his own holdings to top $7 billion when Nikola shares were at their peak, she said.

US prosecutors charged Nikola founder Trevor Milton with fraud over false statements about the Badger and other vehicles
US prosecutors charged Nikola founder Trevor Milton with fraud over false statements about the Badger and other vehicles Nikola Motor / -

Milton vaulted to prominence last September when the company announced a partnership with General Motors shortly after going public through a merger with a special-purpose acquisition company (SPAC).

But things quickly fell apart. Two days after the GM deal was announced, Hindenburg Research published a report accusing the startup of "intricate fraud" based on multiple lies by Milton.

Milton left the company later that month and GM terminated the transaction to take a stake in Nikola in late November.

Milton's legal team said the charges resulted from "faulty and incomplete investigation" that will be exposed when the defendant is "exonerated," according to a statement from attorneys Brad Bondi, Marc Mukasey and Terence Healy

"Trevor Milton is innocent; this is a new low in the government's efforts to criminalize lawful business conduct," the lawyers said.

Nikola said Milton had not been involved with the company since his resignation.

"Today's government actions are against Mr. Milton individually, and not against the company," Nikola said in a statement.

"The company has cooperated with the government throughout the course of its inquiry. We remain committed to our previously announced milestones and timelines and are focused on delivering Nikola Tre battery electric trucks later this year from the company's manufacturing facilities."

In parallel to the criminal case, the Securities and Exchange Commission (SEC) unveiled civil fraud charges against Milton, alleging he repeatedly spread false information about Nikola products on social media.

The SEC is seeking to bar Milton from serving as a corporate officer and director, as well fines and payments for ill-gotten gains, according to a press release.

Shares of Nikola slumped 11.0 percent to $12.63 in afternoon trading.