By Matthew Russell Lee, Patreon Video Podcast
BBC - Guardian UK - Honduras - ESPN Vlog
SDNY COURTHOUSE, Sept 8 – Just after the indictment of electric vehicle maker Nikola's founder Trevor Milton was unsealed on July 29, 2021 a press conference was held in the Southern District of New York prosecutors' office. Inner City Press went and asked about the SEC complaint's reference to Milton targeting "Robinhood investors." Video here.
US Attorney Strauss and her SEC colleague (on the job for all of one week) both deferred comment on particular companies or phenomena like Robinhood, or Elon Musk, or SPACs. But it seems there will be more prosecutions coming - including in the crypto-currency space?
On September 15, 2021 the assigned District Judge Edgardo Ramos held an oral argument. Milton wants to move the case to Utah or Arizona, with a sealed motion. (Manafort's lender Steve Calk asked the same, to move to Chicago, which was denied). On September 15 Inner City Press live tweeted here (and podcast here)
In March 2022, Milton withdrew his Second Circuit appeal of venue. On March 22, the US Attorney's Office filed a joint schedule: "Dear Judge Ramos: The Government respectfully writes to advise the Court that the parties have, following the dismissal of the defendant’s interlocutory appeal, conferred and agreed to a revised schedule with respect to the exchange of certain material and information prior to and during trial pending confirmation of the currently scheduled trial of July 18, 2022, as a firm trial date by the committee of the Southern District of New York charged with assigning trial dates. 1 The schedule is as follows: June 6, 2022: The Government provides to the defendant material covered by 18 U.S.C. § 3500, including material pursuant to Giglio v. United States, 405 U.S. 150 (1972). Full letter on Patreon here.
On August 30, Milton's lawyers filed a reply on lulling, including " Defense counsel’s review of discovery produced by the government suggests that the government’s allegation related to the so-called “lulling” conduct represents an attempt to shore up a basis for venue in the Southern District of New York for Count Four. Compare with Kerik, 615 F. Supp. 2d at 270 (finding the government’s attempt to categorize a wire sent within the limitations period as a “lull” to be unpersuasive and dismissing wire fraud charge that relied upon the “lull” to fall within the statute of limitations as time-barred). Mr. Milton will establish at trial that the purported victim, not Mr. Milton, proposed the Subsequent Transaction and expressed a desire for further transactions, which makes the government’s idea that Mr. Milton used the Subsequent Transaction to “lull” the purported victim beyond absurd." Full letter on Patreon here.
On August 11, Milton's lawyers filed: "to invoke this Court’s power, under Rule 26.2(c), F. R. Crim. P., to “inspect” certain materials in camera, and to make rulings on the question whether those materials constitute, in whole or in part, a “statement” of a witness that the defense must produce to the government. As the Second Circuit has held: “When it is doubtful whether [certain materials] are subject to discovery [under Rule 26.2], the [party] should submit them to the trial court for an in camera determination[.]” United States v. Scotti, 47 F.3d 1237, 1249 (2d Cir. 1995). * * * Mr. Milton has provided the government with a list of witnesses whom Mr. Milton reasonably expects to call in this case. That list includes Dane Davis, formerly employed as the Chief Technology Officer at Nikola. On two occasions in 2022, certain of Mr. Milton’s counsel met with Davis. Counsel did not take notes during those meetings. Mr. Milton now submits, in camera, two attorney memoranda, each of which (a) was written by counsel after the meeting, (b) runs to three pages, and (c) reflects in part the mental impressions of counsel regarding those meetings." Full letter on Patreon here.
On August 18, Milton had a similar request with regard to Richard Boardman, and also submitted "t two related documents for in camera review. One is an unredacted email; the other is an email chain, which we have already redacted to remove what constitutes, in our professional judgment, mental impressions, personal beliefs, trial strategy and/or legal conclusions of the lawyers involved in the meeting. We now ask the Court to inspect these two documents and to reach the same conclusion that we urge above regarding the Boardman Memorandum." Full letter on Patreon here.
On August 23, Judge Ramos denied both requests: "Having reviewed the defendant’s motions for a Fed. R. Crim. P. 26.2(f) ruling, Docs. 161 and 162, the Court holds that the documents submitted in camera need not be produced. See Palermo v. United States, 360 U.S. 343, 352–53 (1959) (“summaries of an oral statement which evidence substantial selection of material, or which were prepared after the interview without the aid of complete notes, and hence rest on the memory of the agent, are not to be produced.”). The Clerk of Court is respectfully directed to terminate the motions, Docs. 161 and 162."
Also on August 22-23, the US filed a 24 page opposition to Milton's motion to dismiss count 4 or for a bill of particulars, on Patreon here.
Inner City Press went to the September 8 final pre-trial conference, taking these notes:
Milton's motion for a bill of particulars denied. Motion to strike surplus-age acknowledged as moot by Mukasey, and withdrawn. Milton's motion for an evidentiary hearing on the government's filter team protocol is denied, as based on speculation. And finally, Milton's motion to dismiss Count 4 is denied.
On motions in limine: first the US' motions, to exclude Milton's expert Prof Kirkus [or Kirfus?] on automotive prototypes, battery technology, hydrogen fuel cell technology and relations between automakers and supplier, including parts.
Judge Ramos: These appear somewhat relevant. Why should I exclude them?
AUSA: These facts are not disputed. And there will be witnesses from Nikola.
Mukasey: It will not be as easy to get the information out of them. The case turns on the use of words by Mr. Milton. What does "build" mean? Prof Kirkus will say you can build a truck on a computer, not hammer and nails. The US is alleging vapor-ware.
Judge Ramos: I don't think a truck on a computer is a built truck.
Mukasey: You're reacting like a lay person. In this field, built can be on the computer. There's a design element.
Judge Ramos: What about hydrogen - is he an expert?
Mukasey: He knows more than a lay person.
Judge Ramos: Today's Daily is about how far we are away from rolling out these kind of vehicles nationwide. I'll defer on my decision on if he is necessary. If so, we can hold a Daubert hearing. Next, on the proposed financial expert, including social media as relates to Mr. Milton, and the effect of social media on investors.
AUSA Roos: Our expert will be speaking on social media, so the defense expert can too. But the defense has said that a company's stock performance is volatile, so investment is risky. Our concern is it gets close to victim-blaming.
Judge Ramos: But some investments ARE more risky that others. When we are shown a 401-K, we are shown a buffet of possible investments.
[As social media is discussed, Milton whips out his phone.]
AUSA Roos: Plus, we don't have discovery about these experts.
Milton's lawyer Bondy: When I speak with experts, I don't take notes. And we will not be victim-blaming.
AUSA Roos: With those assurance, we're OK with this expert as a witness.
Milton's 3d lawyer, Mr. Caruso: We are not running an advice of counsel defense. We are running a good faith defense. There's an email in which the general counsel tells Trevor Milton, Yes, you walked the line, apologies to Johnny Cash.
Judge Ramos: I'm sure the lawyers at these tables can walk the line. Motion denied as moot.
AUSA: We will have three or four investors as witnesses.
Mukasey: And we will be asking if they are reasonable investors.
AUSA: That just means, Using reasons. Not being, for example, a Goldman Sachs investor.
Judge Ramos: I am granting the government's motion to exclude arguments that investors acted negligently. But the defense can ask tough questions, we'll deal with it... Now the motion to exclude evidence about income and purchases, this is garden variety fraud evidence. Why should I keep it out?
Bondy: It's prejudicial, and some not tied to the acts alleged.
AUSA: We don't put in evidence of him buying property before the 2020 period.
Milton's 4th lawyer, Ms. Young: We oppose the testimony of Dina Maslin, all she would talk about are social media posts, followers and the like. People out in the ether, chatting. It's prejudicial.
AUSA Roos: She's the dean of the USC Marketing School. She has a degree from MIT.... Let me give you a tutorial about the Wall Street Bets area of Reddit.
Judge Ramos: Are you saying Nikola became a meme stock?
AUSA: Some investors would say so.
Mukasey: This is junk science.
Judge Ramos: I'm going to allow her to testify.
The video of the Nikola-1 truck rolling down the hill WILL come in. As will references to people investing in Nikola during COVID lockdown. Mukasey recounts a decision by SDNY Judge Seibel in White Plains that COVID and PPE not be mentioned in a bank fraud case. But it's coming in. Now just the logistics.
Meanwhile, Judge Alvin K. Hellerstein has stayed the SEC v. Milton case...
Back on July 29 at 12:30 pm Milton was presented before SDNY Magistrate Judge Sarah Netburn, and freed on consent, on $100 million bond. Inner City Press was in the Magistrates Courtroom and live tweeted it, here: (and podcast here)
The case is US v. Milton, 21-cr-478 (Ramos)
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