Trevor Milton, founder of electric truck startup Nikola, has been charged with three counts of fraud for allegedly misleading investors about “nearly all aspects” of his company’s business.
The U.S. Department of Justice announced the charges on Thursday, claiming that, from November 2019 to September 2020, Milton schemed to defraud investors into buying shares of Nikola. He is alleged to have done this through misleading statements about the company’s products, technology, and future sales potential, per The Wall Street Journal.
Under the indictment, Milton is ordered to forfeit all property whose origin can be traced to the fraud, which is likely to include the more than $1 billion he made from the initial public offering of Nikola last June.
Read More: Nikola Denies Claim It’s An “Intricate Fraud,” Threatens Legal Action Over Report
The charges follow an investigation the Securities and Exchange Commission launched into the company and its CEO in September 2020. The investigation began just a few days after a bombshell report from short-seller, Hindenburg Research.
That report, published shortly after GM invested heavily in the company, claimed that Nikola was an “intricate fraud” that parlayed an “ocean of lies into a partnership with the largest auto OEM in America.”
The company sued, denying the claims, though Hindenburg Research argued that the company’s “constant threat of legal action or retaliation against anyone who speaks out” and its obsession with secrecy were the two biggest warnings that something might be amiss.
The report also alleged that product demonstrations made by the company were largely faked and accused it of painting “Zero Emission Hydrogen Electric” on the side of a semi that run on compressed natural gas to mislead people into believing that its technology was farther along than it actually was.
Just a few weeks later, on September 21, 2020, Milton stepped down from his post as chairman.
Authorities say that Milton voluntarily surrendered and has been taken into federal custody. He is expected to appear in court later today.