Introduction and Trevor Milton Sentencing Overview

John Dehlin [00:00:00] Hello everyone, and welcome to another edition of Mormon Stories podcast. I'm your host, John Dehlin. It is December 19, 2023 and today we are here to discuss the sentencing of Mormon fraudster Trevor Milton. For those of you who don't know, Trevor Milton was hyped to be, or put himself out to be, sort of the Elon Musk of the large 18 wheeler kind of truck industry. He's a Mormon, he born and raised in Utah and somehow he rose to the level of global industry, convincing GM to partner with him, convincing the world that he had figured out how to engineer hydrogen based, I don't know, electric trucks that were going to transform the industry. And super big fraudster fooled the world. At some point, his company was worth, I don't know, one to two billion dollars.

Mark Pugsley [00:01:00] No, 60.

John Dehlin [00:01:01] 60 billion. Yeah. And it was all like Elizabeth Holmes, it was all freaking vaporware. And the weirdest thing of all is that most of you have no idea that this ever happened. Those of you who live in Utah, those of you who are Mormon have probably never heard of Trevor Milton or of Nicola. But I can tell you CNBC certainly has heard of him. And so I am so fortunate to have back on Mormon Stories, Mark Pugsley. Mark's been on Story several times before. I think of him as Utah's fraud expert and watchdog. Hey, Mark, thanks for coming back.

Mark Pugsley [00:01:42] Thanks.

John Dehlin [00:01:42] It's so good to have you. Yeah, so I heard about this story first on like a Wall Street Journal podcast. So this is literally international news. And you're kind of. You were on that podcast. Can you just tell people really quickly an intro to who you are, what that podcast was, how big this story is, and then we'll jump right in.

Guest [00:02:06] Wow.

Mark Pugsley [00:02:06] Okay. So the podcast you're referring to, I think last time I was here we were talking about the church's settlement with the sec. So I think I mentioned it there, but it's called Bad Bets B A D B E T S by the Wall Street Journal. And we were season two. And there's a whole history to how that came about. It was interesting. You know, one of the things that I do in my legal practice, John, is I represent whistleblowers. And that's usually we've come here. The last two times I came here, talk about David Nilsen, who is a good friend, but not a client. Today we're gonna talk about some folks who are my clients. And I just wanna say from the beginning, and I might reiterate this at some point, that I have permission to talk about this story. Most people come to me are anonymous, stay anonymous. I do not talk about their stories. But in this case, these clients ultimately decided to go public with their story. And that's why I'm able to sit here and talk about our conversations to some extent. I' to be careful. But I have been given permission by these clients to talk about this story and to share our experience, our collective experience about what happened in the Nicola story. One other just quick disclaimer, John, is that my memory, as I've gotten older, I'm practicing 30 years now, believe it or not. It makes me feel very old, but my memory's not perfect. Most of the stuff we're going to talk about began happening in 2016. The time that I got involved was 2020. So it's been a little bit of time that we've been dealing with this story. And I've tried to reread some of the materials to remind myself of the deadlines and the dates and things, but it's not perfect. In terms of my legal practice, I've been practicing in Salt Lake City for a long time. I was with a large law firm for a number of years doing securities law, securities litigation. So when I graduated from law school, the law firm I was with was in Los Angeles. Then I moved back to Utah, where I grew up, and I began doing all sorts of different securities litigation related practices. And so it just because Utah has a fraud problem, I kept getting these calls and I would get calls from just regular people saying, hey, I invested with this guy who I kind of knew. He was in my ward typically, and I can't get my money out and he's not returning my phone calls and I need your help. And at first I was not that interested in those cases. And then I began to take on those cases to try to help people get their money out of these. In many cases, Ponzi schemes, or sometimes it was just like a loan they'd given to some guy. It was almost always within the LDS community. And there's a word for that called affinity fraud. Affinity fraud is the type of fraud where they have a connection with someone through church, typically. And Utah has the highest incident of that in the world. Probably. I don't know, Certainly in the country, we have the highest per capita incidence of Ponzi schemes. And there's. That's one of the first, I guess it's the first podcast I did with you was years ago talking about that problem. And we can talk about it today. I mean, one of the things that's interesting to talk about is why. What is going on here? Is there something in the water? Why are guys like Trevor Milton or Tim Ballard or we can name a bunch of them, what is going on? Why are these people proliferating in this state and you don't really see this other places. So there's a lot to talk about in terms of that. So through my practice, eventually after the Bernie Madoff Ponzi scheme, the SEC implemented a program called the SEC Whistleblower Program. And it was about 11 years ago when they implemented that program where if you bring information about fraud to the SEC and they take action, shut down a fraud scheme and impose fines and penalties, then they'll pay you an award if they collect more than a million dollars. And so I don't know, I just kind of started doing it on the side. People would call me and I'd say, well, I don't know if we can really sue that person, but I can file a whistleblower case. So I did and I started filing them and I filed quite a few over the years. And then through this Nicola case, I represented some whistleblowers and we did the case we're going to talk about today. And then they did a podcast about it. The Wall Street Journal thought it was interest story to do a podcast about. There's actually a book being written about it and we are in discussions potentially to do a docu series on Netflix. We'll see if it ever comes about. But it's kind of a fun story. I like to talk about it. It's a crazy, it's got a lot of crazy stuff that happened in the interim and we can chat about that.

Guest 2 [00:07:11] Yeah.

John Dehlin [00:07:11] And if I can just add as teasers, there isn't just Utah Mormon fraud of global scale. There's also allegations of sexual abuse or harassment against Trevor Milton, both by, I don't know, at least one co worker and at least one family member. As I understand it, I've been in touch with some people who have made allegations. And then there's at least one death by suicide associated with somebody who tried to turn Trevor Milton in. And if Sean Reyes weren't beat up enough on Mormon Stories podcast because of his involvement with Tim Ballard in Operation Underground Railroad and all the lawsuits, there's, you know, we're even going to be talking about an apparent, I don't know, Sean Reyes, Utah Attorney General cover up protecting Trevor Milton at the expense of both, you know, alleged victims and one alleged whistleblower who died by suicide. So this is a Dark, deep story that just. That implicates, again, the same group, whether it's Tim Ballard or Sean Reyes or Trevor Milton. There's just this group of bros. Mormon, Powerful Mormon bros. Involved in a lot of shady stuff.

Mark Pugsley [00:08:30] Yep. And there are others out there. And there will be more stories to talk about down the road.

John Dehlin [00:08:36] Why are we laughing?

Mark Pugsley [00:08:37] I don't know. It's just like. It's crazy because you asked me the other day, you were texting me and you said, is there a Shawn Reyes aspect to this story? And I said, yes. Yes, there is. It's a new rule. He's gonna make an appearance in all future Mormon Stories podcast.

John Dehlin [00:08:52] He'll be the new Mormon Stories mascot.

Mark Pugsley [00:08:54] Yeah, that's right. Who happens to be a friend of mine, I should say, just for. For clarity. I know Sean really well.

John Dehlin [00:08:59] Oh, wow.

Mark Pugsley [00:09:00] Yeah.

John Dehlin [00:09:00] A friend of yours.

Mark Pugsley [00:09:01] Yeah.

John Dehlin [00:09:02] After today.

Mark Pugsley [00:09:02] And former client.

Guest 2 [00:09:03] Oh, wow.

John Dehlin [00:09:04] Okay. All right. Well, I don't know about this.

Mark Pugsley [00:09:07] After today. I haven't publicly criticized him, so. But we can chat.

Trevor Milton's Mormon Background and Early Life

John Dehlin [00:09:11] So let's begin by just showing. I mean, I guess so I'll just have to say a lot of people wanted me to tell the story, and a lot of people had personal experiences with Trevor Milton, but they were terrified that he would sue them if they told the truth. What is it about today that made maybe you and others more comfortable to talk about the story?

Mark Pugsley [00:09:33] Well, he was. Yesterday I was glued to Twitter because I wasn't able to fly out to New York for the sensing. But he was sentenced to four years in prison and a million dollar fine. And then we believe there will also be additional penalties in terms of restitution to investors. The number the court accepted was $660 million in restitution. We will see if that's what's ultimately imposed in terms of a penalty. The other thing is that. And we can talk more about it, but the SEC hasn't even taken action against him yet. They've been holding back till the criminal case finishes. And we believe that the SEC is going to implement its own or start up its own case now, which has kind of been on hold o. So he's got lots of stuff coming at him. And I think now people maybe feel freer to talk because he's been sentenced.

John Dehlin [00:10:21] Is he on bail or is he in prison?

Mark Pugsley [00:10:23] He was not incarcerated. He's appealing it. And the judge said that he could stay out during the appeal, which could be years. So that's unfortunate. And I can tell you about my view on the sentence, but I attended the Trial part of it, so I can talk a little bit about that. So I've been involved in this for about three years now.

John Dehlin [00:10:44] All right, well, let's go ahead and roll the clip and just show kind of the headlines as of yesterday from one from cnbc.

▶ Video Clip 1

Video Clip 1 [00:10:52] Details. Phil, what can you tell us?

Video Clip 1 [00:10:55] Kelly, Trevor Milton has been sentenced to four years in prison for his role in fraud committed at Nikola when He was the CEO. Two counts of wire fraud, one count of securities fraud. The prosecutors were looking for 11 years in prison. The defense attorneys were arguing that Trevor Milton should be given probation in part to care for his wife who has been ill. The judge ultimately decided Trevor Milton, the founder and former CEO of Nikola, will be spending the next four years, at least that's the sentence. Four years in prison for fraud. Kelly, back to you.

Video Clip 1 [00:11:31] Phil. Is this a surprising sentence? Because it's, you know, to have to see someone going and now having to

Video Clip 1 [00:11:37] spend significant jail time really tells you

Video Clip 1 [00:11:40] about the seriousness of what they said took place here.

Video Clip 1 [00:11:44] Well, these were serious crimes. I mean, if you were an investor and you bought into what Trevor Milton was selling when he was the CEO in the summer of 2020, you could make an argument. You could say, hey, look, you know, this caused me a lot of financial harm. And what the judge ultimately had to decide was, did that harm that was caused by Trevor Milton making the claims that he made the wire fraud claims as well as the security fraud, was that worth a decade in prison or was it worth much less? And ultimately, he decided four years was the appropriate term. Also, keep in mind that in arbitration two months ago, Trevor Milton was determined that he will have to pay $165 million back to Nikola. And just for one more thing to keep in mind, Kelly, he still owns 52 million shares of Nikola. So we're waiting to get some details from the courtroom in terms of what he will have to give up financially in addition to this sentence of four years.

Guest 1 [00:12:42] All right, Phil, thank you for bringing that to us.

John Dehlin [00:12:45] I mean, 52 million shares of Nikola. I have to think that these shares are worthless, but am I wrong?

Mark Pugsley [00:12:52] No, it's trading. I haven't checked it in the last few days, but it's been trading around a dollar. So. But he, like he said, he got hit with $160 million arbitration award against him between the company, because the company basically sued him for all these problems. The company has already settled with the SEC for 125 million. Can he pay, you know, the company back? Can he pay investors back? Can he pay the SEC fines that haven't even been assessed yet. I mean, it remains to be seen, but I'm not holding my breath.

John Dehlin [00:13:23] Well, let's do the Mormon story now. So obviously for people to wonder why we're talking about this dude's from St. George. Dude's Mormon. He's been faithful Mormon, as far as we know, for quite some time. So this is a Mormon story. And let's just jump to what is worth talking about. About the beginnings of Trevor Milton, I'll

Mark Pugsley [00:13:47] just give you a quick spoiler alert. Is that at some point when he bought a 20. I think it's a $32 million ranch up in Camas, or Oakley, or I think it was in Oakley. The largest purchase of real estate in US History, Utah history, excuse me, at the time is he took people on a tour and he paused at the wine cellar, which was full of wine, and said, now, this is my wife. My wife drinks wine. But of course, I would never drink this wine. I'm like, okay, because we really were worried. But yeah, I mean, I don't know the guy. I've seen him in person, but I've never met him. So I'll just tell you what I know from the podcast and research others have done, which is he grew up in small towns in Utah, not even in St. George. He grew up in an even smaller town than that. He grew up very poor. I believe he was someone who was always very ambitious. And he went on a mission to Brazil. He came back and did, believe it or not, summer sales. And we can talk about, you know,

John Dehlin [00:14:57] that was for those who aren't Mormon. That was a bit of an ironic.

Mark Pugsley [00:15:00] Yeah, yeah. I have a really strong view of summer sales, and I've said, you've just

John Dehlin [00:15:06] offended half my male audience.

Mark Pugsley [00:15:07] Yeah, yeah. Okay, fine. Get a real job. That's all I'll say. But I brought some other clients and I. This is public is we caused Vivint Smart Home to be fined $23 million or so for unethical sales practices. So I have strong views about summer sales, and let me tell you why. Trevor Milton is a perfect example. He comes home, naive kid. He actually tried to buy alarm systems, so he was kind of selling them himself. This was, I think, maybe even before Vivint was a thing. But he. What happens is these kids come home and they have thick skins and they're good at sales because, you know, if you can sell religion, you can sell anything. And so they get snapped up by Vivint and the solar companies and the pest control Companies and they take these good, nice Mormon missionaries.

John Dehlin [00:16:04] It's alarm systems, pest control and solar. And solar, right.

Mark Pugsley [00:16:07] Yeah, always.

John Dehlin [00:16:08] No offense. No shade, you know, no, I'll shade all day long.

Mark Pugsley [00:16:12] I think it's terrible because what's happening is, is they're taking these nice kids who are ethical, I'm sure, good people, and they put them out and they train them to engage in often, not always, but often unethical sales practices.

John Dehlin [00:16:29] It's worth mentioning that they like them because they have their experience as Mormon missionaries. That's part of the Mormon angle. Right.

Mark Pugsley [00:16:36] And there may be a connection between what we were just talking about. Why is there so many of these. Why are there so many of these people like this who are kind of these Alpha Provo Bros, flat brim hats with whatever going around selling stupid things that people are buying and driving Lamborghinis. I mean, this is a thing in Utah. And it's either crypto now, there's all sorts of other groups out there that are just selling stuff. And that's because you take these return missionaries and they are good at selling stuff. But I have no problem with that. I have no problem with the industry of sales generally. But what I have a problem with is taking good, young returned missionaries and really teaching them, training them to be unethical in the way they do it. And you know, I've heard you tell long ago the story about your mission where there were baptisms that were probably not. People didn't know what they were getting themselves into. And there is a bit of an ethos at times. I served an LDS mission, so I can speak from authority at some level that you get the deal done because the end always justifies the means. Right? Whatever you can say, as long as you get them in the water and you can put it on your stats, that is okay. And that I think is the problem is if you take that into sales and then if you take that same ethos, that same level of ethic into a publicly traded company where the SEC is monitoring what you say, where investors are making decisions based on what you say, it's super problematic. And anyway, I'm fine. You can all have your jobs, whatever your jobs are, but just please be honest and ethical in the way that you sell things because people need to know what they're buying. And when you're putting other people's names on credit applications and doing some of the unethical stuff that Vivint was doing, I think that's problematic. And I think that leads to bigger problems in Our community here in Salt Lake City, in Utah, I should say.

John Dehlin [00:18:32] All right, well, I definitely respect your point of view and your perspective. So now that I've just lost me all day long, now I've lost half

Mark Pugsley [00:18:39] my daughters, that's fine, you know, blow me up. I don't care. But I am happy to say that I'm. I just have encouraged all my sons not to do that.

John Dehlin [00:18:54] Yeah, no, okay, that's. That, that's fair. All right, so he serves a mission in Brazil. In Brazil. And then what?

Early Business Ventures and Pattern of Exaggeration

Mark Pugsley [00:19:02] Then he comes home back to St. George and he begins. He actually buys. I think he went to uvu, but he only. In fact, I believe he dropped out of high school and then he went to UVU and only went for one semester. And he always says, you know, I dropped out. Kind of like, you know, I'm like Mark Zuckerberg or I'm like Elon Musk dropping out of college. But it was uvu, guys. It wasn't Stanford and it wasn't Harvard. But the point is that came out in the trial was that he was actually kicked out of UVU for cheating. So that's. I don't have personal knowledge of that. That's what came out in the trial. So he's a guy that I guess has been ethically challenged for a long time. He went into the alarm company, he bought an Alarm Co. In St. George, tried to get that to work, didn't really get it to work. Then he met a guy who's going to come up because he's one of my clients, and he taught him how to convert trucks into. Taught him how to convert trucks into basically hybrid diesel running off of batteries. And they started this kind of hybrid thing, conversion company that led to Trevor kind of trying to take that to the next level. He tried to work deals with fairly big companies to have them buy the technology that he claimed had abilities that it did not. And then ultimately it led to him creating the company Nikola, which was intended to be a company that made trucks that were electric, essentially, but were hybrid. Let me just. Can I just say a couple things about this? I'll try to be fast, please.

John Dehlin [00:20:47] No, no.

Mark Pugsley [00:20:48] Maybe people don't care, but if you have a Tesla, you know that there are extra challenges having a battery powered car. One of them is recharging. My wife drives a Tesla and we other day we went up to Jackson Hole and we had to spend a half an hour in Evanston, Wyoming, recharging the thing so we could get up to Jackson. So that's A challenge. Right. It's kind of a pain in the butt. Then take that and try to make it into a semi truck that's carrying, you know, tons and tons of cargo. And that's what Trevor Milton was trying to do. But there's some technological problems with that. One of them is batteries are extremely heavy and these things would weigh many tons, which makes it even harder. And then you'd have to put so many batteries in a truck like that that you'd have to pull. You'd have to take two hours. Every few hundred miles, you have to stop for two hours to charge all those batteries because it takes time to charge that many big batteries. So the idea of having a Tesla of semi trucks is a great one, but the technology just is not there. And so what Trevor Milton began doing was saying, I'm going to do a hybrid type technology involving compressed natural gas cng. So it's like you fill it up with compressed natural gas and that runs a generator, kind of like an actual hybrid. It was essentially a hybrid. And that powers the batteries and that can go and go and go. That also.

John Dehlin [00:22:19] Cause if he didn't do that, I'm imagining Elon Musk would say, dude, the physics aren't there yet.

Mark Pugsley [00:22:24] The physics aren't there.

John Dehlin [00:22:25] You're fooling people.

Mark Pugsley [00:22:26] And Elon Musk is developed. I mean, there's pictures out there of a Tesla semi truck. I mean, it's a trillion dollar industry, the semi truck industry. Right. So people have been trying to crack that, just like the automobile. And Tesla's been trying to do it. And Trevor Milton said he was trying to do it. And one of the reasons he has his company got so successful, as we'll talk about, is because he was lying to people about overcoming these huge technological challenges that he took on.

John Dehlin [00:22:57] Yeah, okay, so a trail of fraud, but somehow he always jumps to a better position after each fraud. Is that right?

Mark Pugsley [00:23:05] Yeah, that's. I mean, I don't know how much you want to get into the history, but. But yeah, that's essentially what happens. And along the way he leaves a lot of people really angry. And he left a wake of partners and investors that were all really angry with him for years because he would kind of develop something and then he would take the technology and move it to another company and then he would not. You know, then all the people are left with an empty shell of a company and the technology is gone. One of the people that invested in or that helped him start a company called D Hybrid was supposed to be essentially a Truck conversion company. And he had a bunch of investors, people that were putting in 20,000, 30,000, in most cases, their entire life savings. And then he basically started another company, this is just one example, called Dehybrid Systems, which is very similarly named, and then moved a lot of the technology into the new company and left the old company pretty much empty.

John Dehlin [00:24:10] And probably investors and stakeholders and owners cutting people out of any potential profit. Right.

Mark Pugsley [00:24:17] And they're litigating. You know, I'm not making this up. He Dehybrid had investors who then sued them. Swift, which is a big trucking company, entered into this big contract with him and later sued him, like, really quickly after that. And then they alleged in their complaint, and this is not personal knowledge to me, but they alleged that he was taking their investment that was supposed to be developing the technology and buying boats and stuff. The bad bets. Interviews Mike, who's one of my clients, who helped him develop this company, D Hybrid. And he was hardly ever getting paid. And then Trevor kept bringing in these bigger boats, and he was always living this lifestyle that was way ahead of where his financial situation was, and investors were paying for that. He claimed to start a company, I think it was called Upiller, that was going to be bigger than Amazon, and that it was going to be a kind of an online marketplace, and it never went anywhere. So he was telling people that he would double their money if they invested with him. They did, in many cases, trusting that he was who he said he was and that the technology was what he said it would do. And then they ended up losing their money, every single one of them. Some of them he paid back if they were loud enough. But for the most part, they got screwed. So this is a classic. In this Upiller company, he claimed that he had invented the shopping cart, the online shopping cart, where you put your stuff in it.

John Dehlin [00:25:45] That's like Al Gore inventing the Internet.

Mark Pugsley [00:25:47] Yeah, yeah, exactly. And, you know, the report that we're going to talk about basically said that that had been invented 15 years prior, so his company didn't even exist. He was like, in junior high and that was invented. But he claimed to everyone that he had more hits than Amazon on his website, which was not true.

John Dehlin [00:26:06] No way. People.

Mark Pugsley [00:26:07] People were investing with him based on these kind of crazy assertions.

John Dehlin [00:26:11] It's like the bigger the lie, the more people believe it. Sometimes.

Mark Pugsley [00:26:13] Sometimes. Yeah, sometimes. And you'll see that pattern here, and everything is exaggerated. Like if the Swift deal, I think, was a $16 million deal, but he kept telling everyone, it was a $20 million deal. And then. And the next deal he did, he sold it to another company. And he claimed that this swift contract later was a 250 to $300 million contract and it was only 16. So his exaggerations, to go to your point, John, his exaggerations kept getting more and more outrageous. And the problem is, you know, he's a college dropout, a high school dropout, and he all of a sudden is able to talk his way into running a multi billion dollar trucking company. I mean, it's crazy, and it's so

John Dehlin [00:27:03] weird that we just see this pattern of people being able to hop, I'm repeating myself, hop from fraud to fraud to fraud, leaving fraud and disenchanted partners and investors in their wake, victims in their wake. But then the next fraud makes him wealthier and wealthier and wealthier. How does it not. How do they not stop at the first fraud? You know what I mean?

Mark Pugsley [00:27:26] Well, as he gets wealthier, he has more ability to hire good lawyers to sue them if they say anything about him. He started getting people to sign non disclosure agreements or NDAs. So he was. And he began being much more aggressive about making sure people didn't talk. If people talked too much to the victims, then he would pay them some money and make them go away and of course make them sign releases that said they couldn't talk about it. That may sound familiar.

John Dehlin [00:27:51] So what do you mean familiar? House?

Mark Pugsley [00:27:53] Just like the LDS Church does sex abuse cases, if you pay people enough money, then they won't talk. And so as you get more wealthy, you have increasing ability to manage litigation and hire good lawyers to scare people. That's the reality.

John Dehlin [00:28:10] Okay, all right. So that's kind of his background. Is there anything else worth mentioning before we talk about us hopping to Nicola?

Mark Pugsley [00:28:19] Yeah, we'll talk about the sentencing and all the stuff later about what happened, but a lot of the mission stuff actually comes into play in his sentencing, surprisingly.

John Dehlin [00:28:29] Oh, really? The Mormon mission stuff. Okay, all right.

Mark Pugsley [00:28:32] And his tithing, he uses that to claim how charitable he was.

John Dehlin [00:28:36] Okay, all right, well, this can't get any better. Okay. Or worse. So what's next?

Mark Pugsley [00:28:44] So, you know, and I would encourage people to listen to the Bad Bets podcast because it interviews a lot of these victims and a lot of them tell the story of how he came to them. I can't really do it justice, John. I don't have all these audios ready to go, but these people talked in great detail about what he told them and why he. Why they invested. What was it about Trevor that was compelling to them? And it's very interesting to hear because a lot of the stuff that he was telling them are exactly the kind of things that you would kind of expect. So he begins to move up and he moves after Swift. And he got into a big dispute. Then he began moving to build a company called Nikola. And Nikola was not initially called that. I think it was called Bluegen Systems or something beforehand. But eventually he took the name Nikola. And many people may not know the significance of that name, but the stock play, the investment play that Trevor began working into was, you know, we're the next Tesla. At that point, Tesla was extremely successful. And people who were not invested were kicking themselves because it was worth like $400 billion. And they were saying, geez, I wish I would have trusted this Elon Musk guy and invested in that company sooner. But they didn't. So they're thinking, okay, what's the next Tesla? So Trevor changed the name of his company to. To Nicola. And the person that invented electricity, maybe not invented, but the scientist in Italy who was one of the inventors of electricity, was Nikola Tesla. So Tesla was already taken. So he chose the guy's first name and named his company Nikola. And that was not by accident, for sure. He was trying to position this company as the next Tesla only for trucks. But, you know, it's a different. It's a whole different deal. He had to, you know, figure out a lot of highly technical challenges in order to get these trucks to work. And so what happened is he began to use lies and exaggerations to tell people that he had accomplished things that he had not accomplished. And so he began developing this truck. He got lots of investors, he got some, including some big Wall street investors to come in, and he began actually building a truck. The problem is he didn't have the technological expertise to do it. And if you look at his people, he was basically outsourcing and then putting off the shelf products together into a truck and then telling people that it was all proprietary technology, which it was not. When you buy an inverter, which is one of the key aspects of these trucks, these electric engines, they have an inverter that changes electricity into power, and they put one over each wheel in most cases. And he, in one time, for instance, he showed a copy of the inverters that he claimed were being developed in house with all of his in house extra experts, when in reality he had taken some tape to cover up the label showing what the actual battery, the Inverter was bought off the shelf. It was something that anyone could buy. But he claimed in these videos very brazenly that this was developed in house. So that was just not true. That's just one example of a lot of different examples where people, where he was basically saying that they had the technological expertise in house, that they did not have to accomplish some of these technological challenges, which were huge. I mean, every scientist in the world was trying to accomplish these kind of things and figure out how to make this, to tap into this trillion dollar trucking industry. And no one could do it. And yet Trevor kept coming out and saying that he had done it. And it's hard to get into all the details on this because there's so many examples. And one of the things that we used in the report that my clients put together was his social media posts. So he did a lot of podcast interviews, he did a lot of interviews with trucking industry reporters. He did a lot of. He put a lot of videos out on Instagram. And all of this was then later used by the Department of Justice as evidence of, of how he was saying that he had accomplished things that he really had not accomplished. So one of the first ones that he did was he had a truck that was built, and he hired a guy named Paul Lackey out of Portland, Oregon, who was an electronic engineer, electric engineer, who specialized in electric vehicles and his company to come out and help them kind of put together this truck. And so these guys, Trevor went out and sweet talked to him and said, hey, you guys are so great, I just want you to. I'm going to probably buy your company, but I want your expertise to help us put on this big reveal of our truck. So he knew that investors needed something more than just promises. They needed to actually see it working. So he hired Paul and his partner to come out and put together this truck and put together all the things. The problem was that the truck itself required a huge amount of technology that they actually didn't have. And so they came out before this big reveal of what's called the Nikola one. And they were kind of shocked when the pieces that they had shipped were still on the warehouse. Two weeks before this big reveal, they were still just sitting on the pallet that they had sent them on. So nothing had been done. And Trevor was. Ford was so busy hyping the company that he was not busy running the company. And he really didn't have in house technological expertise that was up to this task of making this truck a reality. This hybrid natural gas Hybrid truck that they were claiming they were going to be able to make. So they.

Nikola's Rise and Comparisons to Other Frauds

John Dehlin [00:35:15] I have a quick question. So obviously this is reminding me of Elizabeth Holmes.

Mark Pugsley [00:35:19] Yes.

John Dehlin [00:35:19] And, you know, for those of you who don't know who she is, she was like a Silicon Valley darling who went to Stanford and, you know, started claiming that she could develop a blood testing device that Walgreens ended up licensing or, you know, using or whatever, that she could conduct multiple blood tests with one device. And it was all vaporware.

Guest [00:35:43] Right.

John Dehlin [00:35:44] But. But, you know, she, like Trevor, starts this company, hires all these engineers, is hyping it all over the world. Certainly she's knowing the whole time that they don't. She doesn't have the technology that she's hyping. But. But for me, there's always this question of did she know that she never was going to have anything and just figured she could pull off a fraud long enough to then take a bunch of money out of. At the end of the. At the end of the deal? Or was it more like this leap of faith where she felt like, well, okay, I'm deceiving people now, but if I get enough good talent in here, we'll develop the stuff so that once the rubber actually meets the road, we have something real. Like, do you have a sense at this point, point in the story where Trevor is in his mind, in his own mind?

Mark Pugsley [00:36:42] I don't. And I really. Yeah, I mean, I think, well, there is this phrase in technology which is fake it till you make it. Right. And I think that's what both of them were doing. They were like, well, if we can just get out there and tell people, then we'll just. It'll eventually we'll get enough money that we can put this whole thing together. The problem is that the. In both cases, I think, and they are, have often been compared. The Theranos story and the Nicholas story are similar in a lot of ways. Unsimilar in the sense that her company never went public. Elizabeth Holmes did not have a public company when she was arrested. Trevor did. She got 11 years in prison, just as an aside, and he got four.

John Dehlin [00:37:22] What is up with that?

Mark Pugsley [00:37:23] What is up with that? I don't know. Different judge, different. They were in different states. You know, it's just judges have the ability. In fact, the Department of Justice asked for the exact same sentence for Trevor that she got 11 years. That was their recommendation, and the judge didn't take it. So unfortunately. But the stories are very similar, and Elizabeth Holmes is someone who is a very interesting character. What's the story? There's the movie about her, and I forget what it's called.

John Dehlin [00:37:53] The Inventor.

Guest 2 [00:37:53] The Inventor.

John Dehlin [00:37:54] I'll have to look at it.

Mark Pugsley [00:37:55] Yeah, yeah, yeah. And it was quite good. And there was a documentary that was done on Theranos that was quite good. And this kind of came soon after that. So our case has always been compared to the Theranos story.

John Dehlin [00:38:07] So, okay, there's the dropout and the inventor out for blood and Silicon Valley. One's a dramatization, I think, and one's maybe a documentary.

Mark Pugsley [00:38:16] Right?

John Dehlin [00:38:17] That's right. I'll have Julie include those in the show.

Mark Pugsley [00:38:19] And they're both well worth watching of, so. Them both. And the documentary is stunning because it really shows kind of how brave the. The whistleblowers were. And in our case, similarly, the whistleblowers. And we'll get to that in a minute. Were also extremely fearful of retaliation, legal action, all that stuff.

John Dehlin [00:38:38] Yeah.

Mark Pugsley [00:38:39] And so it was a. It was really a scary time for all of us.

John Dehlin [00:38:43] So you don't know whether he. You don't know whether he was acting with faith or just knew that.

Mark Pugsley [00:38:49] I would have no way of knowing that. But I do know that he. And we'll get to this. So he didn't hire the right people. I mean, what he was trying to do was one of the most sophisticated and challenging technological challenges known to man.

John Dehlin [00:39:06] Stuff Elon Musk couldn't do. Correct, correct.

Mark Pugsley [00:39:08] And at one point in this story, as he's hyping this technology and hyping his trucks, he claims that he has doubled the life of batteries. Well, batteries are the name of the game in this business. Right. And this is something. All the top technology. It's a huge potential revenue source for any company that can do this, which is to make batteries more efficient. So instead of recharging your Tesla every 300 miles, you can take it 600 miles. I mean, that's a huge issue for anyone that has a Tesla, is how often you have to charge the damn thing. Right. And so this, when it came to trucks, that was even more of a technological challenge. So he claimed at one point before the company went public that he had solved this problem and that he had found that they had technology that they developed that is going to solve all the problems with batteries and that they were going to double that. And so that was something that was hugely important in terms of how investors saw this company. They saw this company as having the best engineers in the world working on the hardest problems and solving them. Because Trevor Kept coming out and saying, we've solved this problem when he had not.

John Dehlin [00:40:23] Okay, okay, what happens next? We've got some clips, but let me know when to play some of the clips.

The Hydrogen Truck Reveal and False Claims

Mark Pugsley [00:40:30] So, really, in 2016, I think people began to ask in the industry, hey, dude, are you gonna. The company had not gone public yet, which is a big deal, by the way, because public companies have SEC oversight and non public companies less so. So the company had not gone public, but he came out and said, you know, realized that he needed to show a truck that could work because people were doubting his ability. And so he had.

John Dehlin [00:40:57] How much do you think he had raised by this point? Any idea?

Mark Pugsley [00:40:59] I don't remember. I don't remember, but it was quite a bit. And he had. Oh, yeah, yeah. And he had some big investments, especially from a company called Worthington, which is a big. Like a trucking company, I think, of some sort. And then he had other partnerships that he'd been developed. He was really good. He was very good at selling. Right. That's what he was good at. Not much good at it. Not much else. He was really good at that.

John Dehlin [00:41:23] Not quite an engineer.

Mark Pugsley [00:41:24] No. And so he had a. He knew that he had to take it to the next level, so he. He took his. He hired my client, Paul, hired this other company and had some other people, and he got this truck design off of some German website that they bought it, and then he had an actual fiberglass thing made and then put it out there for the press to see. And this was really a big day for Nikola. Before it was preparing to go public, they knew they needed to get ready to go public. That's where the real money is. And so he knew he had to really make a splash with this truck and show people that he wasn't just full of it, that he was actually making things that work. And so I think you've got video of this big reveal happened in Salt Lake City, Utah, and it happened in, you know, not far from actually where I work. And they, you know, got to. Let's see, what's the date of that, John? I think it's in 2016. Okay. Yeah. So it's in 2016. He takes some of the parts, puts them together on top of a chassis. There were no batteries in it. There were no engine motors in it. There was no compressed natural gas in it. It was pretty much not operable. And what happened is he got some people together. He hyped it online. He hyped it on Twitter. He got Governor Herbert to show up and then he made this big reveal. But he said some things that became really crucial in his criminal trial. And you'll hear them, I think. If you can play that.

John Dehlin [00:43:00] Yeah. And really quickly. I'm gonna play it. And the way I'm gonna play it, I hope this works, is in a way where we can kind of make comments on it as it's playing.

Mark Pugsley [00:43:12] Okay.

John Dehlin [00:43:12] Is that all right?

Mark Pugsley [00:43:13] Sure.

John Dehlin [00:43:13] So also start it running now. It's basically. This is on, by the way. This is on like the Wayback Machine. And it's got this stage for those who are just listening. It's got this stage with this huge. Let me make sure the audio is working. It's got the stage with this huge, I don't know, cloth over the truck. You can see it full of a bunch of people. Okay, so here's the countdown now. And you see all these people in a room.

Mark Pugsley [00:43:45] A lot of people.

John Dehlin [00:43:46] Where is this?

Mark Pugsley [00:43:47] This is in Salt Lake City, down at a. I don't know exactly the address, but just downtown.

John Dehlin [00:43:52] Okay. And again, there's, like, a big truck on stage with a big sheet over it. And.

Mark Pugsley [00:43:57] And listen. Listen to what. What he says about everything kind of

▶ Video Clip 2

Video Clip 2 [00:44:02] starts when you're young and you have a lot of paths in life you can take. But this was my path to transform how trucking works. Everything about it, from the ground up. America was built on the backs of diesels. It's really incredible. I love the history of diesels. It was developed primarily because it was more efficient and stronger than the alternatives at the time. And now we face the same problems. How do we build something that's stronger, more efficient, and cleaner? And that's our obligation. It's our future. How do we take the past and improve on it? And that's what the Nikola one does.

Video Clip 2 [00:44:35] You know, Met a lot of dreamers. Sometimes they have great ideas, but they can't ever get it off the ground. So when I first met Trevor, it's pretty exciting to see that he actually had more than just on paper. He had a whole engineering group that spent a lot of time putting this product together.

Video Clip 2 [00:44:53] We've built something that no one else thought was possible, and we've done it with a team of passionate, driven young entrepreneurs all put into one incredible team.

Video Clip 2 [00:45:02] Here at Nikola, anytime there's new technologies in the market that we think will be a game changer, we tend to try to participate with those manufacturers that's coming to the market with them, and we tend to try to help them understand what's needed in our industry. Because a lot of people will build a product and miss the mark. And contacting Trevor when he first made his announcement and then seeing his reaction to some of the suggestions that we were offering, he's been very receptive. I have no ownership in the company, but I can tell you I'm pretty excited about how the company's moving forward, how the products coming to the market.

Video Clip 2 [00:45:42] If something can be done, it should be done. We've been able to prove it works. Now it's time for us as a company to take the products out on the road, show the that they can outperform a diesel in every application, in every situation, and change the philosophy of an entire society.

Video Clip 2 [00:45:59] I think there's going to be so many changes that once the driver gets in that truck, it's going to be a different world for him. Going to batteries as opposed to diesel, being emissions free, having a vehicle that doesn't require all the maintenance that today's vehicles do, having a vehicle that's more comfortable for the driver. But it's also going to create a different world for us, the owners that have to keep these guys on the road for days at a time. And this could be that game changer that we're all looking for to enhance the availability of good, quality, safe drivers.

Video Clip 2 [00:46:33] This is to all the thinkers and the inventors and the entrepreneurs that didn't stop after their first failure. It was the same thing here. We failed, we failed, we failed and then we succeeded.

John Dehlin [00:46:44] He's telegraphing, oh, my gosh. Ladies and gentlemen, Kevin Link, chief engineer, Nikola Motor Company. All right, so I'm gonna pause really quickly. We failed and failed and failed. Now trust us. Now give us a few billion dollars. It's different.

Mark Pugsley [00:47:04] I mean, that's that. But that is the story he was telling all along, you know, that this is what entrepreneurs do. They keep trying, they don't give up. And, you know, okay, that's probably true,

John Dehlin [00:47:14] but he failed to have successes along the way.

Mark Pugsley [00:47:17] You know, he also said, you noticed that he said, we put together a team of entrepreneurs. What he really needed was a team of engineers, but he didn't actually have that. He had a few, but not very many.

John Dehlin [00:47:26] Do you know who that dude was that was shilling for him?

Mark Pugsley [00:47:29] Yeah, that was the owner of a company called US Express, which is a trucking company. So one of the reasons when Nikola went public, just as an aside about US Express, it's important that they worked a deal with Trevor to put in a bunch of orders for these trucks. So one of the things when they went public is to express how many truck orders they had. If we have billions of dollars worth of truck orders, that makes people really willing to invest in the company, right? Well, US Express was a third of those, a third of the total orders. But the problem is that according to its public filings, it had, you know, I think it was like $100 million in the bank. Well, the number of orders that it had in were worth $3.6 billion. So there's just no way that US Express could ever have fulfilled its orders. It was more like a sweetheart deal. I think that he worked with Trevor. It's like Trevor said, hey, I'm speculating here, but it's probably. He said, we need a bunch of orders to get our stock price going, help us out. And the guy helped him out.

John Dehlin [00:48:32] So one of my favorite comments so far is from Joe Whipp. He writes, Milton is a Mormon. Question mark?

Mark Pugsley [00:48:38] Yes.

John Dehlin [00:48:39] Do you want to answer that?

Guest 3 [00:48:40] Yes.

Mark Pugsley [00:48:40] He is active to this day, as far as I know.

John Dehlin [00:48:43] Tithe paying, active Mormon.

Mark Pugsley [00:48:45] Yes.

John Dehlin [00:48:46] All right, so let's play a little bit more of the clip now. Who is this Kevin Link guy? Is this your client?

Mark Pugsley [00:48:51] No, he was, I think he was an engineer. I can't remember exactly what his role was, but he worked for Nicholas.

John Dehlin [00:48:59] And this is just to give people a sense of the fraud, basically. So here's a little bit more.

Mark Pugsley [00:49:03] Pay attention to what, what Trevor says.

John Dehlin [00:49:06] Okay,

▶ Video Clip 3

Video Clip 3 [00:49:13] Thank you. Good evening and welcome.

Video Clip 3 [00:49:16] It's so great to see all of

Video Clip 3 [00:49:17] you here and thank you for those

Video Clip 3 [00:49:19] who are joining us online.

Video Clip 3 [00:49:21] Is this like his cousin?

Video Clip 3 [00:49:22] My name is Kevin Link. I'm the chief engineer for Nikola Motor Company.

Video Clip 3 [00:49:27] We certainly come a long way from where we started when we first started designing this truck in our CEO's basement.

Video Clip 3 [00:49:34] And I'm happy and excited to share

Video Clip 3 [00:49:36] with you this huge milestone for our

Video Clip 3 [00:49:38] company and for the future of trucking.

Video Clip 3 [00:49:41] Can you pause?

Video Clip 3 [00:49:42] It's my distinct.

Video Clip 3 [00:49:42] Absolutely.

Video Clip 3 [00:49:44] Pleasure and honor to introduce our CEO and founder, Trevor Milton.

John Dehlin [00:49:49] All right, so before we show that. Go ahead.

Mark Pugsley [00:49:50] I just want to tell you about Kevin Link, who is, I'm sure a very nice fellow. I've never met him, but when Trevor talks about bringing some of the top talent, engineering talent in the world to his company, this guy is his head of technology, Right. A very senior guy. Well, let me tell you what his jobs were. Sorry, what his jobs were before he began working there. We reviewed Kevin's biography on LinkedIn and found that prior to joining Nicola, he worked for 7 months designing oil filled products using CAD software. 3.5 years in software development, and prior to that, he spent nine months repairing pinball machines. So this is the guy.

John Dehlin [00:50:33] He can't make this stuff up, man.

Guest 2 [00:50:35] Oh, no.

John Dehlin [00:50:36] He doesn't look like. He doesn't look like a MIT engineer, by the way, but he's. He looks like a dude from Magna.

Mark Pugsley [00:50:43] He's from. Well, his first. His mechanical engineering job at his last one, it was at Profire, which is in Linden, Utah.

John Dehlin [00:50:49] So he's from Linden.

Mark Pugsley [00:50:50] He's a good Utah guy.

John Dehlin [00:50:51] Okay. I don't mean to be flipped, but this is. You can't make this stuff up.

Guest 2 [00:50:56] Yeah.

John Dehlin [00:50:56] All right.

Mark Pugsley [00:50:57] LinkedIn is not good for people who are trying to lie about their tech. Their technology people.

John Dehlin [00:51:02] I didn't even hide it well. Okay, let's go to, I guess, Trevor. Oh, good.

Guest 2 [00:51:14] Yeah.

John Dehlin [00:51:15] He comes out on a. He comes out on a razor. Yeah, Like a four wheel. It's like the Utah tech, bro version of Steve Jobs.

Guest [00:51:26] Oh, it is. Yeah.

John Dehlin [00:51:27] That is.

Mark Pugsley [00:51:29] At least he didn't wear a turtleneck or something.

John Dehlin [00:51:33] Wow.

▶ Video Clip 4

Video Clip 4 [00:51:33] Well, a good crowd out here tonight. Thank you. I appreciate it. This is a really incredible time. One of my favorite quotes in the world. Just. Just a couple days ago, one of our users sent it off to us, and it just really, just shocked me. It was everything I've been trying to capture and explain to people for years and years. And that is the electric light did not come from continuous improvements of candles.

Video Clip 4 [00:51:56] Dude. Backdrop.

Video Clip 4 [00:51:57] That's a really hard concept to try to explain to a big Fortune 500 company or a Fortune 100 or. Or even a Fortune 1000. It's very, very difficult. It takes a complete redesign from the ground up. And most of the time, big companies can't take those risks, primarily because there was a failure.

Video Clip 4 [00:52:14] It would affect a company of that

Video Clip 4 [00:52:16] size much more than a smaller company like ours. And that's one of the great advantages that we have as an entrepreneur and one of the tasks in life that we have as entrepreneurs is to be able to take risks that no one else thought was possible, that no one ever thought that they could ever do. The consequences of would be too great. But we took it and we achieved. It's a really incredible story of our. Of our time. I'm going to go through a couple things. Some of you guys saw me pull up in the Nikola Zero. We're going to be talking about a lot of really incredible products tonight. Some people know a lot about Nikola. Some people are just learning. We.

Video Clip 4 [00:52:50] I want to obviously thank everyone.

Video Clip 4 [00:52:52] That's live Streaming all over the world. We have people.

John Dehlin [00:52:54] We get a sense here tonight what's going on here. Is there any part of the this that you want me to fast forward to that's kind of really essential?

Mark Pugsley [00:53:01] Well, yeah, after the. If you could talk about just fast forward to where he pulls the cloth off of the truck, because he does have a long intro. But this is when he. You'll see several things that are really important here. One is he uses the phrase, this is not a pusher. And in the automobile industry, a pusher is the near future.

John Dehlin [00:53:25] Go ahead.

Mark Pugsley [00:53:26] A pusher is where you put a car on a stage to show how it looks, but it actually doesn't have an engine in it. Well, that truck that he's pointing to was 100% a pusher. It had no engine at all. It had a few gears above the wheels, but there was no engine in it. There was no power to it other than what was coming up through the stage in an extension cord. That's what was powering the screens that he looks at down. So that ended up being really important in the. Can you find that? I don't know if you can find that. That time.

John Dehlin [00:54:00] It's taken me a second. Okay, so it literally was a pusher.

Mark Pugsley [00:54:03] It was a pusher.

John Dehlin [00:54:04] He was telling everybody it isn't a pusher.

Mark Pugsley [00:54:07] Yeah. And he actually said. He said that we've developed this truck. And he went into quite a bit of detail about how there's a chain in the cockpit so that people don't get in and drive it off the stage, which is just ridiculous because you'd have to get a bunch of people and push it to get it off that stage. It was literally towed up there by another truck. So it was a pusher. Yet he repeatedly says. He repeatedly says that it was a fully operable truck, which was not true.

John Dehlin [00:54:45] All right, so let's. I fast forward until like, three quarters into the presentation where it looks like he's about to play a video that looks like it's about to be in advance of the reveal.

▶ Video Clip 5

Video Clip 5 [00:54:55] So behind every milestone and every innovation,

Video Clip 5 [00:54:58] this is the famous video.

Video Clip 5 [00:54:59] Every industry craft, there exists a mover. Someone who gets things where they need to be and gets them there fast.

Video Clip 5 [00:55:09] So, like, at that point, that's supposed to be one of his trucks, right? Like, functional, Right?

Video Clip 5 [00:55:13] Well, I. I don't know.

Video Clip 5 [00:55:14] These movers make the world we know possible. Our progress depends on their commitment to a job done well and a job done right. They bridge our networks and span our gaps where others see Obstacles that defy success. Movers see nothing but open road. They know the ins and outs of this country. Every inch of asphalt from New York City to Los Angeles.

Video Clip 5 [00:55:42] This is almost parody.

Video Clip 5 [00:55:43] They've long hauled the Rockies and the Cascades through the Shenandoah Valley and the Blue Ridge.

Video Clip 5 [00:55:49] He's a sales guy.

Video Clip 5 [00:55:50] Yeah.

Video Clip 5 [00:55:51] They've seen shorelines, plains, cities and suburbs. They've seen the Great Lakes and crossed the Mississippi countless times.

Video Clip 5 [00:55:59] Tie.

Video Clip 5 [00:56:00] They put tools in our reach, the tools we need to transform today's ambitions into the accomplishments of tomorrow. Movers jumpstart innovation. They move our dreams and our inspiration. They move our joy and our laughter.

Video Clip 5 [00:56:20] They move our shelter and our streets with their daughter.

Video Clip 5 [00:56:23] They move the bonds that forge our identity. They move the common good we cherish

Video Clip 5 [00:56:29] in spite of division.

Video Clip 5 [00:56:30] This is a really long intro.

Video Clip 5 [00:56:32] They move the moments we share with our families around the dinner table.

Video Clip 5 [00:56:35] There's apples and apple pie. They move the world.

Video Clip 5 [00:56:40] What moves them?

Video Clip 5 [00:56:41] Tell us.

Video Clip 5 [00:56:42] For too long, we've asked the movers who make our dreams possible to depend on outdated technology.

Video Clip 5 [00:56:47] Okay.

Video Clip 5 [00:56:48] Technology that compromises the planet we work so tirelessly toward.

Video Clip 5 [00:56:52] I mean, come on.

Video Clip 5 [00:56:53] For too long, we've asked them to sacrifice their health and their safety so we can have better access to the things that give our lives meaning. For too long, we've ignored the simple fact that what we move comes at a cost. A cost to our environment, to our future, and to ourselves. It's easy to accept what we have without questioning how we got it. It's easy. Easy to accept. Modest change that's outpaced by the rates

Video Clip 5 [00:57:22] are not the truck.

Video Clip 5 [00:57:23] When we accept these failures, we choose to fail the same people who for more than half a century have refused to fail us. Movers revolutionized

Video Clip 5 [00:57:36] time.

Video Clip 5 [00:57:36] We revolutionize theirs.

Video Clip 5 [00:57:38] Spinning on the stage.

Video Clip 5 [00:57:40] For those that bravely stand at the

Video Clip 5 [00:57:42] crossroads of innovation and enterprise, they had to like.

Video Clip 5 [00:57:45] For those who are prepared to give our children a moral compass and not

Video Clip 5 [00:57:48] just a road you're seeing. Are not powered. For those who wish to leave the

Video Clip 5 [00:57:52] planet better than it was when we found it. For those who are driven. For those who dare to reinvent. For those who dare to reimagine.

John Dehlin [00:58:09] Here it is. She comes off. There it is. The US Express Nikola one.

Mark Pugsley [00:58:17] There it is.

John Dehlin [00:58:19] Okay. And everybody's smiling and taking photos and. All right. Is that. Is that what we should show for that one?

Guest 2 [00:58:28] Yeah.

Mark Pugsley [00:58:28] I mean, he then gets up and you can see it, but he actually says, you know, I'll read the words that he said. This truck is by far the most state of the art truck ever built in history. This thing fully functions and works. This is a real truck. This is not a pusher. That's the quote that you get in a minute. And Gary Herbert, our governor, is staying up there with him. And while he's just absolutely lying through his teeth about what was underneath the hood of that truck. So he had press there, and it was more just a hype, you know, to get it ready for eventually going public. That's what he's doing. He's building hype, building hype with the press in order to get people to buy his stock when he goes public. Okay, so here's big twist, big twist here that people probably didn't even notice. But stenciled on that truck in maybe 6 inches by 20 inches or whatever is H2, H2 hydrogen. So two weeks before this reveal, he changed his entire business model, like entire business model to say that this truck is no longer powered by natural gas. It's now going to be powered by hydrogen that is powering the battery recharging. Right. So some engine needs to power the batteries to get recharged so you don't have to pull over and plug in every 10 minutes. So what happened is he changed his entire business model because technically speaking, hydrogen is cleaner, burns cleaner. There's no emissions from hydrogen. There are some emissions from natural gas. And so he, in all of his engineering, engineering people are like, what? What are you talking about? We've been working towards this compressed natural gas for years now, and all of a sudden, you're changing our entire business model. Now, let me say this, that hydrogen technology does exist. You can run a hydrogen engine, right? But hydrogen itself is very, very expensive to produce. And so there were all these new. And also the engines that power hydrogen generators are very complicated and huge. They would have weighed tens of thousands of pounds. That would have been way too heavy. So there were extreme technological challenges to this shift. And so plot twist again. He hires someone to be in charge of developing natural gas or, excuse me, hydrogen fuel stations, because there aren't any. So you'd have to be able to fill it up along the way. Right? Well, he decides that he's going to not only develop trucks that are technologically unlike anything else out there, but he was then going to figure out how to make hydrogen at a cheap price and make it in such volume that we could and then implement gas stations throughout the United States so people can refill their trucks. So just think about the challenges of this business model. It Was absurdly challenging to be able to accomplish all of these things to generate the hydrogen. Anyway. So all of his engineers.

Guest 2 [01:01:39] Who.

Mark Pugsley [01:01:39] The engineers he did have. There were a few. One of them is my client. Were like, you what? Hydrogen. What? They didn't even know that hydrogen was gonna be on the truck until that sheet came off. That's how much advanced notice the engineers had.

John Dehlin [01:01:53] Again, another illustration of the idea that the bigger the lie, sometimes the more people believe it.

Mark Pugsley [01:01:59] If you build it, they make fake it till you make it.

John Dehlin [01:02:02] Right.

Mark Pugsley [01:02:03] So later, he did admit, after Bloomberg revealed that that was all a farce, that whole reveal was not a real operative truck. He did admit. Admit that it wasn't operable after all.

John Dehlin [01:02:15] So someone did.

Mark Pugsley [01:02:16] Bloomberg did. Yeah. In 2016 or 17, they published an article kind of saying that truck was not actually what.

John Dehlin [01:02:23] So they did investigative reporting or whatever kind of.

Mark Pugsley [01:02:26] But mostly it was because my client Paul reached out to them and said, hey, this guy is full of, you know, what he had worked for. He was the guy that put the thing together. He knew what was underneath the hood.

John Dehlin [01:02:36] Well, then he was complicit.

Mark Pugsley [01:02:38] Well, he was a contractor, but he felt complicit. Yes. And he felt angry about it because he saw what was happening. He saw that when Trevor brought people into the company and gave them tours, there was really not much engineering going on, just selling, and that he was always trying to bring in more money. And so he was really offended by it, and that's why he contacted Bloomberg, and that's ultimately why we began working with him as well.

John Dehlin [01:03:02] Okay, well, okay, so when Bloomberg says that wasn't a real truck, Trevor Milton's response is what? I never said it was.

Mark Pugsley [01:03:11] Yeah, he basically said, well, you know, I didn't actually say that. I just. And, oh, by the way, there was a table with parts on front of it. So people would have known that that wasn't true. Well, that's not true. There's nothing in that video you just showed with a table full of parts that just wasn't true. So he.

Guest 2 [01:03:30] He.

Mark Pugsley [01:03:30] And then he threatened to sue Bloomberg, but he did not do that. And he tried to get the reporter fired.

John Dehlin [01:03:36] Okay.

Mark Pugsley [01:03:38] Doesn't like criticism.

John Dehlin [01:03:39] Okay. All right, so, yeah. What comes next? What leads us to the second video?

Social Media Fraud and the Rolling Truck Video

Mark Pugsley [01:03:47] So we actually. I mean, there's a lot of things that happen in the interim. He began to continue to develop this, and he began making statements on social media about the capabilities that he. That his truck had. And I'm not. I'm going to get the timing of this the chronology wrong, I'm sure. But at some point, he began claiming that he could make hydrogen for $3 a gallon or $3 a kilogram or something. Whatever it is that would make it competitive with diesel. Well, that was just not true. He had never had made a single ounce of hydrogen. He didn't have the technology, he didn't have the engineers. But he nevertheless just started getting out there on Twitter and on Instagram and telling people that he'd accomplished this really huge. Yet another. You know, like last time when he said he doubled the life of batteries. This was another, like, huge engineering marvel that he claimed to have accomplished, which was just not true.

John Dehlin [01:04:46] And I'm just dying to know. Was like, Elon Musk. Like, hey, come on, let me come see Trevor. Let me see. Let me talk to your engineers. Like, let's partner. Like, where's Elon? I guess that's my question.

Mark Pugsley [01:04:56] I don't know. I think Elon didn't give these guys any credit. I don't know. He was not. He didn't like them. They. Trevor Milton hated Elon. He was jealous of what he'd accomplished. From all we could tell, he actually sued Elon. When Elon started developing his own electric truck, then he sued him. So there was litigation there, sort of for like $2 billion for stealing their design, which was ridiculous because they had bought the design from some dude in Germany.

Guest 2 [01:05:20] Anyway,

Mark Pugsley [01:05:23] so then again, he starts hyping more things about the technology. He claims that they're developing it in house, the hydrogen. And then this is another. Here's another LinkedIn moment for us, and we'll talk about how we put together this report in a minute. But we discovered in the course of this that. That the guy that he'd put in charge of this hugely complicated task of rolling out infrastructure for hydrogen distribution. Right. You think about gas stations everywhere in the country. Imagine a whole new network of new gas stations that have hydrogen. Or maybe he could partner with someone, but whatever. Hugely complicated task. Well, the guy he put in charge of it was his little brother, of course.

John Dehlin [01:06:08] Also from LYNDON.

Mark Pugsley [01:06:09] Yes, from St. George, but no. But more recently. So we also looked at his LinkedIn and his job. This is true. I am not kidding you. His job before being the head of hydrogen infrastructure was he was pouring cement in Hawaii. Not an engineer, never been an engineer, But a bro. But a bro. And he's literally Trevor's bro. And he. He got like, 110 million shares as a part of that. I mean, he got this huge stock allotment because he was part of the company. So I'm not sure. Again, all you have to do is pull up the guy on LinkedIn and you can see that he was literally a driveway pouring subcontractor in Hawaii.

John Dehlin [01:06:55] It's like, we've got David Whitmer and John Whitmer and Oliver Cowdery. Like, we've got the entire Whitmer family.

Mark Pugsley [01:07:02] We got the whole gang. And it's just coincidence. They're really the most qualified people. We've got Joseph F. Smith. We've got Joseph Fielding Smith. We've got Joseph Smith. It's just coincidence that they all have that same name.

John Dehlin [01:07:12] Don't forget Hiram.

Mark Pugsley [01:07:13] Oh, Hiram. Sorry, sorry. Yeah.

John Dehlin [01:07:16] And Joseph Senior. Yeah, okay. All right.

Mark Pugsley [01:07:20] Anyway, he comes by.

John Dehlin [01:07:22] Too much fun.

Mark Pugsley [01:07:22] Right, Right.

John Dehlin [01:07:23] Yeah.

Mark Pugsley [01:07:23] So anyway, I'll skip ahead because I don't want to. I want to tell the story about what happened afterward. But he eventually, in 2020, in March of 2020.

John Dehlin [01:07:32] Wait, we got to show the video. Oh, the famous video.

Mark Pugsley [01:07:34] The Vinny.

John Dehlin [01:07:35] Oh, does that come after?

Mark Pugsley [01:07:36] Yeah, no, it comes after.

John Dehlin [01:07:37] Okay.

Mark Pugsley [01:07:38] Right before they went public.

John Dehlin [01:07:39] Okay, keep going.

Guest 3 [01:07:40] So.

Mark Pugsley [01:07:40] No, no, no. This is a good time for that. So at some point, again, after the big reveal, people kept saying, well, is this real?

John Dehlin [01:07:48] Where's that prototype?

Mark Pugsley [01:07:49] Yeah, like, show us. You say you've got all this working technology. Why don't you post a video of your technology? So finally he decided, oh, dang. I guess I better. Oh, gosh darn it, I guess I better go. I better show them a truck that's

John Dehlin [01:08:04] driving a functional truck.

Mark Pugsley [01:08:06] Yeah, yeah, yeah. So here you go. So then he. He publishes. He posts this. This. This became infamous. This is what everyone. This was the big reveal down the road where why our report got so much infamous.

John Dehlin [01:08:17] Is this pre IPO or post.

Mark Pugsley [01:08:19] It's barely pre IPO. I believe it was 2019.

John Dehlin [01:08:21] And just what the video is going to show is a functional Nikola truck in. In or around the Great Salt Lake. Right.

Mark Pugsley [01:08:32] 2018, on. On a road called the Mormon Trail. Believe it or not, that is a true story.

John Dehlin [01:08:39] But what did he actually do? Is it.

Mark Pugsley [01:08:41] Well, you gotta show the video first. You gotta let him.

John Dehlin [01:08:44] All right. But listeners won't be able to see it, but I'll try and narrate it. All right, so. So here's the quote. Functional Nikola truck driving around the Great Salt Lake on Mormon.

Guest 1 [01:08:59] What?

John Dehlin [01:08:59] The Mormon.

Mark Pugsley [01:09:00] The Mormon Trail.

John Dehlin [01:09:00] Mormon Trail. Here it goes.

Mark Pugsley [01:09:01] It was out by, like, Magna or someplace out there.

John Dehlin [01:09:07] So imagine a truck that looks like a Nikola truck driving through the fields of Magna, slash the Great Salt Lake. Now it's parked. You know, it's, it's, it's, it's stopping at the stop signs. Like, this could be out of like Napoleon Dynamite. And there's the sun and there's, I guess drone. Drone coverage of the truck. And it says Nicola 1. And I mean, so, I mean, so

Mark Pugsley [01:09:45] people couldn't see that on the YouTube, could I.

John Dehlin [01:09:49] Did I not show.

Mark Pugsley [01:09:50] No, I think you did. I think you did.

John Dehlin [01:09:51] Okay, so maybe I didn't. Maybe I didn't click the button.

Mark Pugsley [01:09:54] No, I saw it on this tv. I don't, I don't know how your technology works, but.

John Dehlin [01:09:57] All right, let me just. Because I think I may have goofed.

Mark Pugsley [01:10:00] Let me, Let me see if.

John Dehlin [01:10:01] Let me.

Mark Pugsley [01:10:02] What are people, Are people saying that

John Dehlin [01:10:03] they couldn't see it? I'll show it one more time, but let me just. They did see it. Okay. Okay. All right, so go ahead and keep going.

Mark Pugsley [01:10:14] Sorry, I keep looking to the side, everyone. That's because that's where the monitor is.

John Dehlin [01:10:17] Okay, so people saw it.

Mark Pugsley [01:10:18] All right, keep going.

John Dehlin [01:10:19] Okay, so really quickly, like it looked like a fake. Just a fake normal truck. So which, which part of that. Okay, I don't want to be.

Guest 3 [01:10:28] I guess.

John Dehlin [01:10:29] Spoiler.

Mark Pugsley [01:10:29] It was the same unit that was unveiled three years earlier.

John Dehlin [01:10:33] Okay.

Mark Pugsley [01:10:33] Earlier. Right. It's the nuclear one.

John Dehlin [01:10:35] Okay.

Mark Pugsley [01:10:36] And they, they posted it on Twitter and said, behold, the Nikola One in motion. Pre production units hit fleets in 2019 for testing the Nikola Hydrogen electric trucks will take on any semi truck and outperform them in every category. Weight, acceleration, stopping, safety, all with a 500 to 1,000 mile range. So they called it in motion and this became an issue. But everyone saw that video and is like, oh, look, they. They're driving the truck. The truck works.

John Dehlin [01:11:05] So the people who are just listening. And I'll just, I'll play it really quickly, just really quickly for just a second. Now you'll. So it's the same truck that was on stage and it looks like it's moving down the road. The problem is what?

Mark Pugsley [01:11:19] It was coasting. There was no engine in it.

Guest 2 [01:11:24] So it's.

John Dehlin [01:11:25] It's literally like they put it on an incline.

Guest 4 [01:11:28] Yeah.

John Dehlin [01:11:28] So it's going downhill.

Mark Pugsley [01:11:29] They identified. This is the crazy thing.

Guest [01:11:32] I don't.

Mark Pugsley [01:11:32] Can people hear me? This is the crazy thing about this is they did a bunch of research to find a very gradual straight road and then they towed it. Literally towed it. And they had the actor driving it had to sign a non disclosure agreement. So he didn't talk about what it was that he was driving. And then they filmed it with all these drones and stuff to make it look like it was driving. And then they changed the angle. So you really cannot see that that's actually not a flat road, it's a hill, but a very gradual hill.

John Dehlin [01:12:01] So literally it's the same pusher that he showed on stage two years earlier, but like faked to look like it was rolling, that it was driving when it was really towed up to a spot and rolling down a hill.

Mark Pugsley [01:12:13] Yes.

Guest 2 [01:12:14] Yeah.

Mark Pugsley [01:12:15] And everyone loved it. They're like, oh, look, they got it to work. And in fact, my client, who was the engineer that put the thing together, saw that on Twitter and he said, what? How did they get that ready to go? They never hired me to come back and finish the project. Cause he had left after that unveiling and never came back to Salt Lake City. So he couldn't figure out what the heck was going on. If people are listening on the podcast, John, they can Google Nikola one in motion and you can find this video's all over the place. Cause this became a really big deal when we released our report and revealed for the first time that that was fake.

John Dehlin [01:12:50] Yeah, it's one of the most iconic videos on YouTube of the past 10 years for people who follow business.

Mark Pugsley [01:12:55] Yeah, yeah.

John Dehlin [01:12:56] Now I also have a clip of him appearing on Roadshow in the cockpit of the truck. Is this the same around the same time?

Mark Pugsley [01:13:04] Yes.

John Dehlin [01:13:04] Is it okay if I play a little bit of.

Mark Pugsley [01:13:05] Yeah, play that. And then notice what happens when he tries to pinch the screen to expand it. Just watch that part.

John Dehlin [01:13:12] All right, well, I don't know how long this video is, but let's just play the beginning at least. It's an eight minute video, so.

▶ Video Clip 6

Video Clip 6 [01:13:21] Hey, everyone, I am here with Trevor Milton. He is the CEO of Nikola Motor Company and we're in a very, very special truck, the Nikola One. America's first, probably the world's first hydrogen electric semi truck.

Video Clip 6 [01:13:33] Yeah, it's really the first electric truck in the whole world that can go more than 200 miles. It's a full 1200 miles up to 1300 miles on the full. Hydrogen is a zero emission. You can find a thousand miles, has no emissions whatsoever. The only byproduct is water.

Video Clip 6 [01:13:49] So how long have you been working on this? Because this is. This is a fully functioning truck right here that we're sitting in.

Video Clip 6 [01:13:53] So how long have you guys been working on this?

Video Clip 6 [01:13:55] Years in secrecy. It's been very hard. Some of the people Found out about us over the last four or five months as we announced some of the. The lead up to this big event. But it took years and years to get. Get here. This isn't just a pusher like a lot of vehicles that they unveil or vehicles that don't actually function. There's a fully functioning

Video Clip 6 [01:14:14] expand the little iPad there,

Video Clip 6 [01:14:19] by the way. Nothing was actually usable.

Video Clip 6 [01:14:21] Not just a pusher. That's what they call in the automotive world, a vehicle that they just push and it doesn't move.

Nikola's IPO and General Motors Partnership

Video Clip 6 [01:14:26] All right, so let's go through some

Video Clip 6 [01:14:27] of these things here.

Video Clip 6 [01:14:28] I've got a 21 inch touchscreen.

Video Clip 6 [01:14:29] This one's actually on the 21. The 21 will actually encompass this until entire area here in production. So it'll be changed. Right now this is a. There's a 15 inch monitor here.

Video Clip 6 [01:14:38] Exactly.

Video Clip 6 [01:14:38] And then it has dual 7 inch and a 10 inch up there. So this is a 15 in production will be a full 21 inch. And that'll give the driver the ability to actually see all the different freight that is in their freight that's in there.

Video Clip 6 [01:14:49] So, you know, for those who are.

Video Clip 6 [01:14:51] It's cool because the drivers the ability to access all Wi Fi 4G over the air.

Video Clip 6 [01:14:55] I mean, so for those who.

Video Clip 6 [01:14:56] And it lets them actually get all

John Dehlin [01:14:57] who aren't able to see this. He's sitting at this cockpit with this tech journalist, business journalist with some lights and some screens, you know, acting like this is a really fully functioning dashboard.

Mark Pugsley [01:15:11] Exactly.

John Dehlin [01:15:11] Yeah.

Mark Pugsley [01:15:12] But then he tries to expand the screen and nothing happens because it was all static and it was all powered through a cord that came up through the. Through underneath the stage.

John Dehlin [01:15:21] And I'm just again like he's got a bunch of people he's hired. Somebody would have had written the software for this iPad that's sitting there acting like it's really a functioning dashboard. And then all these engineers that are supposed to be in charge of hydrogen or distribution channels or the motor or whatever, are they not asking questions about why are we showing this on display floors, why are we having product launches, IPOs, why are we taking investors when none of us have gotten any of this to actually work in any functional way?

Mark Pugsley [01:15:57] Not only it was years away from anything real. And the technology that he was claiming that they had already accomplished was not at all. There was nobody even working on it. When he claimed that they knew how to do hydrogen, there was not a single employee in the company that was working on hydrogen. Not one. So the engineers, yeah, they were all kind of like looking at each other saying, what the hell? What is he saying? What is he promising? And he's making these kind of representations on social media, on Twitter, in these podcasts, all over the place.

John Dehlin [01:16:29] And I'm just thinking again, where are the whistleblowers? You know what I mean? And I know you've already answered it. Yeah, litigiousness.

Mark Pugsley [01:16:35] NDAs very, very worried.

John Dehlin [01:16:37] Yeah, yeah, they were very worried.

Mark Pugsley [01:16:38] So this is 2018. Things moved pretty quickly at that point. And then they went public and I believe March of 2020, so. Right.

John Dehlin [01:16:50] Beginning of COVID and I'm guessing some investment bank, probably some California or New York, either Silicon Valley or Wall street investment bank, would have done due diligence. They wouldn't have done an IPO without like checking out the tech and looking at the balance sheets. Certainly those companies don't do multi billion dollar IPOs without any credible due diligence. Right.

Mark Pugsley [01:17:15] Except this was not an ipo. It went public through what's called a spac, a special purpose acquisition company. So when an ipo, this is in the weeds a little bit, but when a company goes public through an ipo, they have what's called a quiet period, where they're not allowed to comment at all. What happened is Nikola had another company formed and had that company go public, but it was a shell. And then they merged with the shell that was already public at that point and renamed the shell Nikola. And this was in 2020. This was a big deal. All the spacs, all these companies were doing spacs, and they were getting around a lot of the securities laws that was much more lax. And it enabled. This is really important. This enabled Trevor to avoid what's called the lockup period, where he can't sell his stock. So because he went public through a spac, he was able to immediately sell. I think within the first few months, he sold $70 million in stock. He bought the $32 million ranch up in Oakley. He bought three private planes.

John Dehlin [01:18:16] Dude, if it's okay, let me just show. I actually have one of the whistleblowers or one of the people that have been trying to get him busted for years. He shared with me some photos of what this dude bought. So here I'm showing on the screen an Audi R8 for 200,000, plus a 2019 Quest Kodiak airplane, 100 for $3 million. And there's. I guess that's Trevor Milton with his dog kissing him.

Mark Pugsley [01:18:44] We can't see it on the screen.

John Dehlin [01:18:45] Is it on your. Is it on your screen? There it's definitely on the live stream. Okay, a 5 million dollar TBM, no pun intended, TBM940 turbo prop for $5 million.

Mark Pugsley [01:19:00] Yeah.

John Dehlin [01:19:01] There's a 2020 Gulfstream 600 for $59 million. There is a fly in residence in Alpine, Wyoming for $6 million. Is it on your screen now?

Mark Pugsley [01:19:12] I'm not watching it.

John Dehlin [01:19:13] There's a Milton's dad's fly in residence in Alpine, Wyoming for $6.5 billion.

Mark Pugsley [01:19:19] Don't you have a fly in residence, John? And this is all really fast. I mean he didn't wait for several years for the company to be established. I mean he, he, he liquidated 70 million right off the bat.

John Dehlin [01:19:32] Strike while the iron's hot, right?

Mark Pugsley [01:19:33] And he began living the lifestyle, driving the cars, flying the planes, I mean,

John Dehlin [01:19:37] because the jigs are going to be up pretty soon, right? Pull your money, take advantage of it while you can. All right, let's go back. So we're not done by the way. So there's the, there's the Phoenix mansion with indoor basketball court for 2.2 million. There's the 50 acre mansion in Woodland, Utah for 25.9 million. And then there is the 2,600 acre ranch in Oakley, Utah for 32,500,000. That's not bad. Not bad.

Mark Pugsley [01:20:10] Made the Wall Street Journal, by the way, that purchase of that property,

John Dehlin [01:20:16] you can't make that. This needs to be like a Jared S, a Jared Hess produced movie.

Mark Pugsley [01:20:21] And it was. And if you see Jared, talk to him because you know we're looking. Anyway, he used to be in my parents work. The one thing though is that this all, he bought all this stuff literally within weeks of going public. In most IPOs you'd never be able to do that. So he wanted to live the lifestyle. There's a great anecdote. One of our clients said that when they were talking about all the, all the advantages, they were driving, they just met Trevor, they were driving through Portland talking about all the great advantages of the technology and how it could save the environment. And Trevor made this statement in the car. He said, I don't give a shit about the environment, I just want to make money. And that was probably one of the truest statements that he made. And this by the way, shocked the engineers who were in the EV building business precisely because they were very environmentally conscious. So they really were shocked by this statement that he made. Still worked with him.

John Dehlin [01:21:18] But I just texted Jared Hess and told him he needs to make Trevor Milton the movie. Nickel of the movie. Yeah, let's do it by Jared Hess.

Mark Pugsley [01:21:27] But I was going to say, John, there's one other thing that he did after he went public is he started telling people that he was making hydrogen in this big building in Arizona that they were working out of. And he claimed that they were making all this hydrogen and they were making it at $3 a gallon, which would have been a marvel of engineering if that was true. It was not true. And he claimed he was making it all with solar power. So it was like a totally off the grid warehouse. Well, he claimed that he had like some number of gigawatts of power being generated by the solar panels on the roof. Well, ultimately we showed that, in fact, all we did is go to Google Maps and get this view of the warehouse from the sky. And there were no solar panels on the roof, not one zero. But he claimed that there were. I mean, again, this isn't hard to disprove, but we spent months putting together this report and disproving all of these claims that he was making.

John Dehlin [01:22:29] I mean, this is a perfect example of confirmation bias where people pay attention to the things they want to believe and they ignore the things they don't want to believe.

Mark Pugsley [01:22:37] So perfect example of that is just, I think two months after the company went public, they signed a deal with General Motors. General Motors.

John Dehlin [01:22:45] I've got a clip.

Mark Pugsley [01:22:45] So that's go ahead and show that because you talk about this confirmation bias and you talk about doing research into all these things that were readily provable as false and GM missed it all.

John Dehlin [01:22:59] Yeah. So like this clip is, it's a few minutes, but this is the CEO of GM announcing a partnership with Trevor, Milton and Nikola on cnbc.

Mark Pugsley [01:23:11] Yeah.

John Dehlin [01:23:12] And they're talking. It's just mind blowing. So we got to roll the clip.

Guest 2 [01:23:18] Welcome back to forming a strategic partnership with General Motors. This morning, Nicola Badger will be engineered and manufactured by GM. Jim getting an 11 ownership stake in Nikola's resulting the right to nominate one

Mark Pugsley [01:23:31] director to the board.

Guest 2 [01:23:32] Joining us right now to talk all about it is Trevor Milton, founder and executive chairman of Nikola and Mary Bara, CEO of gm. Good morning to both of you. I'm going to start on the GM side by code, Mary, and try to get a sense of how you were thinking about this partnership and why you ended up deciding to do this. And then I want to get to Trevor on whatever really means.

Guest 1 [01:23:55] Thanks, Andrew.

Mark Pugsley [01:23:56] And we're very excited to be partnering when we look at the opportunity to continue to leverage.

John Dehlin [01:24:02] All right, really quickly, I'm going to apologize for a Second, there's a bit of an echo there. There's a bit of an echo there. I think I, I tried to record this so that it would be for sure available, wouldn't have ads, and it's got a bit of an echo there. But I think it, it kind of makes the point, right? There's, there's the CEO on cnbc, and it's showing the stock ticker. So it's got General Motors up 8% to 32, 46 per share, and then it's got Nikola Corporation up 40% to almost $50 a share. Like that's real money.

Mark Pugsley [01:24:37] No. At the time that we issued our report, Nikola was worth more than Ford Motor Company. Here's the difference. Ford Motor Company had at that point, actually manufactured millions of cars that actually worked. I mean, you know, went on a road and drove, and you could push the gas and they would go somewhere. Trevor Milton, people bought this company, people bought Nikola shares, even though he had never produced a single working vehicle, not one. And it was worth more than Ford.

John Dehlin [01:25:10] Yeah. Unbelievable.

Mark Pugsley [01:25:11] It's crazy. He became a multi billionaire over overnight. He was worth, I think, $8 billion at one point.

John Dehlin [01:25:18] $8 billion when the stock was at its nothing. Vaporware, pure vaporware, 100%. I want to read, I want you to restate what you just said. So, like, and I apologize for this. So just for those who missed it, so, like, vaporware, like, he strikes a deal with the CEO of GM. GM's a legitimate, serious, what, Fortune 50, at least, you know, company.

Mark Pugsley [01:25:45] Yeah.

John Dehlin [01:25:45] And, and he's able to pull the, the, the wool over her eyes and

Mark Pugsley [01:25:51] predominantly with vaporware in her legal department, supposedly would have looked into this deal and said, is he got anything that he can offer? What is he bringing to the table? I don't know what happened. Someone dropped the ball big time.

John Dehlin [01:26:02] Yeah. So, like, like, again, like, talk about the. How much he was worth and how much this deal was.

Mark Pugsley [01:26:07] And so within, within days, within several months, ultimately, of the going public in 2020, Trevor Milton's wealth grew and grew. He had, you know, millions and millions of shares in Nikola. He was the largest shareholder. And he became, I believe, I'm not sure where it topped out, but I believe he was worth $8 billion at one point.

John Dehlin [01:26:30] Eight billion for vaporware.

Mark Pugsley [01:26:33] Yeah.

John Dehlin [01:26:33] Right. Yeah, yeah.

Mark Pugsley [01:26:35] And hopefully people can hear us if you can message us.

John Dehlin [01:26:38] Oh, they can now.

Mark Pugsley [01:26:39] They can. Okay. So the other thing is that he began, you know, on this spending spree, but he didn't stop talking. Now, as a securities lawyer, I Just have to say that, you know, when you're a CEO or chief executive of a publicly traded company, everything you say could put you in jail. Everything. You have to be extremely careful about what you say about your technology. But Trevor didn't ever stop. He didn't ever slow down. He just kept wanting the stock to go up so he would say whatever it took to get that stock price to continue to raise. And the problem with that is that he had a whole legal department. He had at least a general counsel we know of, who we now know was trying to tell him to stop. The other people, his engineers, his cfo, were saying, trevor, it's a public company now. You need to stop saying these things. You can only say things that are verifiable.

Guest 2 [01:27:35] True.

Mark Pugsley [01:27:35] And he would not. He would not stop. And we know that because after this all blew up, the company, Nikola, after they fired Milton, they had a whole internal investigation done, and it was released. And so we know that all of his executives had been telling him all along to stop doing what he was doing, and he wouldn't listen. Okay, sorry, I jumped ahead on the story a little bit.

John Dehlin [01:27:58] No, no, no, that's totally fine. So, you know, eventually he's going to be stepping down, and then there are going to be other allegations.

Mark Pugsley [01:28:07] But let me take a step back, please. So what happened two weeks after. Excuse me. Two weeks after the GM deal that you just showed was released was announced, A group called Hindenburg Research out of New York released its report against it. Literally two weeks. So the stock was, I think, at $60 a share at that point, and it just plummeted. So that's where I come in.

How the Fraud Unraveled and Milton's Resignation

John Dehlin [01:28:38] Okay, yeah, well, let's talk about that first. Okay, so how does this get unraveled?

Mark Pugsley [01:28:45] So in early 2020, I was contacted by the guy who had started D Hybrid with Trevor and taught him the technology. Who wasn't actually had invented this technology, this hybrid technology that Trevor then used this whole time, this guy whose name is. Well, actually, let me step back. One of the first people that contacted me was a guy named Darren Brooks, who was one of the early investors. And he had gotten a letter from Trevor's lawyer saying, hey, I know you invested 30 grand. We're going to offer you $600 to buy out your shares. And then meanwhile, he saw on the news that Trevor had just bought. Had just purchased a $32 million mansion. And so he was understandably shocked and confused about how someone who's only offering a pittance to buy back his shares could have just purchased a $32 million ranch that was in the Wall Street Journal. So he contacted me, and at that point in my career, I was doing much more whistleblower work, representing whistleblowers on all sorts of different stuff. And so I may be the only lawyer that does this in any significant way in the whole state of Utah. So he found his way to me and talked to me, and then I began investigating. It's a longer story, but we ultimately found Mike Shroud. Through a bunch of calls, Mike and I started working together. He was the engineer that had helped with the technology from day one, by the way, that stuff. Trevor had filed a patent for a patent of that technology, and he hadn't put Mike Shroud's name on it. So Trevor not only stole the company from Mike Shrout, he stole the technology and attempted to patent it without giving Mike any credit for that patent. So Mike was super pissed off, to put it mildly. And. But, you know, life had moved on, and he was very sad, but he just didn't know what to do. And so then at some point, we put together, we grew our group of whistleblowers. We found the engineer who had worked, who had been with Trevor up in Portland. His name is Paul Lackey. That's also. This is all public information. Paul then began working with us. Then we began realizing that the amount of information that we had, and especially Mike had a whole garage. He was like a Beautiful Mind guy. He had all these whiteboards. He had boxes and boxes of information, and every email he'd ever sent and received from Trevor, he had. So we needed more horsepower. And we brought in Hindenburg Research out of New York and their researchers, they had a team of, I think, four people at that point, and we brought them in to help us put together this report. And so we worked for a number of months to put together a report that was then released two weeks after the GM announcement. And if people want to find that report, it's quite lengthy, but you can get a lot more detail about what we. What really. My clients put that together. I really can't take credit for that report. It was done by the clients. They all work together very, you know, really 247 for a long time to put this together. And you can. If you Google Hindenburg and Nicola, it'll pop up and you can read the report.

John Dehlin [01:32:13] Well, I'm also going to share right now, again. I've shared it once already in the comments, but I'm going to share it again.

Mark Pugsley [01:32:20] Okay.

John Dehlin [01:32:20] Yeah, for sure. It's a Brilliant report.

Mark Pugsley [01:32:24] Yeah, it's amazing. And the takedown is so clear. It was so devastating. Now, let me. Let me just pause and say that Hindenburg research. I don't want anyone to think that I'm hiding the ball here. Hindenburg research is an activist short seller, which means that they. And they prominently disclose this in the report and in the tweets that they send out when they release their report that they have taken a short position in Nikola stock at that point. So they took a fairly substantial position. I don't actually know how big it was. They shorted the stock in a big way and then released their report. And then they make money if the stock drops. So the better the report, the more money they make. And so they were absolutely incentivized financially to do this, but someone had to do it. I mean, it was just, well, if

John Dehlin [01:33:14] they lie, they get in trouble, right?

Mark Pugsley [01:33:15] Oh, yeah, for sure. And they can get sued. And they get sued by Milton and Nikola, which, by the way, that was Nicola's first response is we're going to sue them. And, you know, Michael, Nate Anderson, who owns Hindenburg, said, you know, bring it.

John Dehlin [01:33:30] Yeah, exactly.

Mark Pugsley [01:33:31] So because that. That report was so well researched with backup for every point that we made.

John Dehlin [01:33:37] Yeah, yeah, because. Because if they were just making stuff up, then. Then like with the Donald Trump election, you know, election machines case, then you lose.

Mark Pugsley [01:33:48] You lose.

John Dehlin [01:33:48] You get sued for defamation.

Mark Pugsley [01:33:50] Yes.

John Dehlin [01:33:50] The evidence hopefully wins out.

Mark Pugsley [01:33:52] Yes.

John Dehlin [01:33:53] And. And Trevor Milton's just got a couple billion dollars extra.

Mark Pugsley [01:33:57] That's right.

John Dehlin [01:33:58] To run his legitimate trucking company. So, like, I love the legal system because it can hopefully vet out legitimate, you know, claims versus false claims.

Mark Pugsley [01:34:08] And on top of that, the market, the stock market also has a way of doing that. Right. Now, if these claims were investigated and turned out not to be true, then Nate and Hindenburg would have lost money on that trade. Right. They were short. They were very exposed. You can lose a ton of money on a short if you're not. Right. So if the stock goes the opposite direction because the market doesn't believe your report, then you're toast. I mean, you can lose millions and millions of dollars just like that. So there was risk there. And that's why I'm not an activist short seller. I don't do that stuff. I would never touch that. It's so risky. But these guys have balls of steel. Can I say that on your. On your podcast?

John Dehlin [01:34:44] I think you just did.

Mark Pugsley [01:34:45] Okay. They do have that. And Nate in particular, who's become a friend of mine, this was Scary, because he was not very well known at that point, and this was a huge thing for him. And because of the. When the video of the truck rolling down the hill was exposed, that was one of the big things that was picked up by the New York Times, the Wall Street Journal, all the big publications, cnbc. It was all over about this report. And they actually profiled Nate. I mean, it was a big deal. And the information that was exposed really just took. Most people, if I tell them, have you heard of Nikola? They'd say no. And then I say, have you heard of that company that had a truck they rolled down the hill? They're like, oh, yeah, yeah, that one. So that, for whatever reason, that piece of that reveal in the report was what really got people attention.

John Dehlin [01:35:39] Yeah. Okay, so this. This report comes out.

Mark Pugsley [01:35:43] Yeah.

John Dehlin [01:35:43] And then how soon after do the wheels start falling off the wagon or the. Or the pusher?

Mark Pugsley [01:35:48] Pretty quick. Yeah. Yeah, exactly. So they. Trevor Milton.

John Dehlin [01:35:53] And what year is this around?

Mark Pugsley [01:35:54] This is 2020 in, I think, September

John Dehlin [01:35:56] three years ago or August three years ago.

Mark Pugsley [01:35:58] Yeah, it's not very long ago.

John Dehlin [01:35:59] Okay.

Mark Pugsley [01:36:00] I mean, kind of long. I don't know. Depends on how you look at it. It's a long.

John Dehlin [01:36:03] Right before co. Right, right.

Mark Pugsley [01:36:04] During COVID Oh, during COVID Yeah. Yeah. And so we released the report, and the stock just plummeted. And my clients, you know, I'm on the phone with them, and they're watching the stock price, and they're watching the fallout. They're watching all the news pick it up. They're watching how many people saw it on Twitter. I mean, it was a very exciting day. I remember it very vividly, just sitting at my computer, talking to these guys on the phone. What did you say? See what happened? Or someone. So it was just really fun. It was a fun thing for us, and I'm sure it wasn't very fun for Trevor.

John Dehlin [01:36:36] I was prepping some video, and I may have missed your answer to this. Are you able to share what your role is representing this client, why they. What part you play?

Mark Pugsley [01:36:46] So I was in this situation, and we have different cases where we work with researchers of different types. We represent with all over the world, literally currently, and in many cases, we see people that have certain information, but then they might need to get someone else that brings in a different aspect, ability or knowledge to the table. So in this case, what we did is I put together a guy who had worked with Trevor before, another guy who worked with Trevor later, when they were putting together the one. The Nikola one, and Then Tindenberg, and we put them together as essentially a whistleblower team. My role is to file a whistleblower report with the sec, which we did.

John Dehlin [01:37:30] And I apologize if you've already answered this. How did they find you? How did they know you were working on this before?

Mark Pugsley [01:37:36] Well, the clients actually found each other in most cases, and they would refer. And sometimes I made a bunch of calls trying to figure out if anyone would talk to us. And then I put them together. They wrote the report. I did not. I was not the writer, but I was the one that facilitated it, just because I thought this was really exciting.

John Dehlin [01:37:54] Got it.

Mark Pugsley [01:37:55] And significant.

John Dehlin [01:37:56] So how soon after the report is released is Trevor Milton stepping down?

Mark Pugsley [01:38:01] I think two days.

John Dehlin [01:38:02] What?

Mark Pugsley [01:38:03] Yeah, it was really fast. It was really fast.

John Dehlin [01:38:06] All right, well, I've got a clip of that announcement on cbc.

Mark Pugsley [01:38:08] Okay.

John Dehlin [01:38:09] Go with these same folks who were talking to the GM chairman.

Mark Pugsley [01:38:12] Yeah.

John Dehlin [01:38:12] And the same folks that we're talking about due diligence.

Mark Pugsley [01:38:15] Yeah.

John Dehlin [01:38:15] And I'm hoping to. To heaven that this, that this clip actually works. So I'm going to unmute the site. I am going to hit play, and we are hopefully going to see this work.

▶ Video Clip 7

Video Clip 7 [01:38:32] Trevor Milton, founder of electric truck company Nikola, is voluntarily stepping down.

Video Clip 7 [01:38:37] Let's get that echo again.

Video Clip 7 [01:38:38] You can hear it, though.

Video Clip 7 [01:38:40] This move comes after short seller Hindenburg Research accused Milton of making false statements about Nikola's technology in order to try and grow and secure partnerships with automakers. Both the Justice Department and the SEC are investigating allegations made by Hindenburg. Nikola says that Milton agreed to relinquish 4.9 million performance based stock units that had been granted to him back in August. Check out the stuff that's down by the 29.5% this morning. Declined about $10. In a tweet, Milton said that he intends to defend himself against false allegations leveled by outside detractors. Nikola board member Stefan Gris Gursky has been appointed chairman, effective immediately. He previously served as vice chairman of General Motors. And remember, just about a week and A half ago, GM took an 11% stake in the company and said that it will produce. This is Nikola's hydrogen fuel cell pickup truck by the end of 2020. Check out GM shares, which, by the way, were up pretty significantly on the news that it had taken a stake in Nikola. They're down by about 3.8% this morning.

Video Clip 7 [01:39:45] It's weird.

Video Clip 7 [01:39:46] We'll see what comes out. But obviously Hindenburg looks somewhat vindicated. So if someone. And guys, if someone says, I don't want to make this about me. I want it to be about the company.

Video Clip 7 [01:40:00] We weren't making it.

Video Clip 7 [01:40:01] People were making it about Milton. They're making it about the company. I mean, either they got proprietary technology or not. Doesn't that sound like obfuscation? Kind of. I don't know.

Video Clip 7 [01:40:11] We'll see what's going on.

Video Clip 7 [01:40:15] He was worth a billion dollars. I don't know if he's below that at this point.

Video Clip 7 [01:40:18] I might get.

Video Clip 7 [01:40:20] Especially if, you know, if some of it had been hyped a little, I think, Phil, we need to talk to Phil.

John Dehlin [01:40:27] That's my favorite line. It's like, we gotta talk to Phil. Where's Phil? Somebody call Phil. Like, they're kind of shell shocked, right?

Mark Pugsley [01:40:39] Oh, yeah. And they'd been hyping this truck like everybody else had. The whole industry, you know, who's that guy?

Guest 2 [01:40:46] Kramer?

Mark Pugsley [01:40:47] You know, he's always yelling. He loved Nicola. I mean, the whole thing was. Was kind of embarrassing, I think, for the financial press because they did not catch it. And they would like to have. Right. They like to be the ones to release this stuff. But that statement that he said, hey, that Hindenburg was vindicated. And that is true. Hindenburg was entirely vindicated. And on top of that, the company, as I mentioned earlier, did a total, complete internal investigation. They hired an outside law firm to come in and interview all the executives. And they basically vindicated all of the main points. That the truck didn't work, that Milton was a loose cannon, that they couldn't shut him down. The legal counsel, the other executives, all said they'd been trying to stop him from talking about this stuff. So they all threw him under the bus. And so he was fired or stepped down.

Criminal Trial, Conviction, and Sentencing

John Dehlin [01:41:39] I think I've got the continuation of this clip, and I think it's just worth showing because it shows the stock ticker and how much each, each. Each is losing. So let's see if we get better audio here.

▶ Video Clip 8

Video Clip 8 [01:41:51] Hydrogen fuel cell pickup truck. By the end of 2020, check out GM shares, which, by the way, were up pretty significantly on the news that it had taken the stake in Nikola. They're down by about 3.8% this morning.

Video Clip 8 [01:42:05] So GM went down like 4%, comes out. Nikola goes down 30%.

Video Clip 8 [01:42:09] Hindenburg looks somewhat vindicated. Sorkin, if someone. And guys, if someone says, I don't want to make this about me somewhat, I want it to be about the company. We weren't making it. People were making about Milton. They're making about the company. I mean, either. Either they got a proprietary technology or Not. I mean, does that. Doesn't that sound like obfuscation? Kind of.

Video Clip 8 [01:42:31] I don't know.

Video Clip 8 [01:42:31] We'll see what finally comes out from all

Video Clip 8 [01:42:36] business.

Video Clip 8 [01:42:36] People.

Video Clip 8 [01:42:37] People.

Video Clip 8 [01:42:37] Yeah, exactly.

Video Clip 8 [01:42:38] At this point, I might get the hell out of there too. Especially if, you know, if. If some of it has been hyped a lot. I think. Phil, we need to talk to Phil. And there's some. Also Daimler and some others I know we're replaced that are, you know, this is not Tesla. If you paint it. Maybe it is, but I'm saying that. But to portray it like, you know, like they've got a barrier to entry like Tesla has for some other places. But I don't know. Beginning of the beginning of what we look at, but. And then we had Mary Bar on. What do you think of that? I mean, how much due diligence? I wonder.

Video Clip 8 [01:43:15] That's the GM exact, right?

Video Clip 8 [01:43:16] Yeah.

Video Clip 8 [01:43:17] Right.

Video Clip 8 [01:43:17] I wonder whether it has something to do with GM being unhappy about the situation and the fact that Gursky, who helped put that deal together, is now running the company.

Video Clip 8 [01:43:27] Right.

Video Clip 8 [01:43:27] These people are shocked.

Video Clip 8 [01:43:29] They really are.

Video Clip 8 [01:43:30] I would agree, 100%.

John Dehlin [01:43:32] So, like, that's literally like the business equivalent of people in faith crisis, right? It is, right?

Mark Pugsley [01:43:37] Yeah. They can't believe their ears. Their beloved guy, their CEO that they thought was so great is turn is turning out to be a big sham. The whole thing was a sham. And the company then. So the fallout. There are several things that came from that. And I. By the way, there's a lot more to this story that is just a lot of detail that I'm trying to not bog us down on. And you can read the report, you can listen to the podcast that gets into a lot of the personal stories about how this impacted our clients. At this point, no one knew who my clients were other than Hindenburg, but they didn't know that I was associated with Hindenburg either. So eventually that all came out through the podcast and through the court. He was indicted by the Department of Justice in the Southern District of New York. Trevor then went to trial. I think it was about six months ago. I'm trying to remember the dates. He was convicted on four counts. You played that clip a bit ago. And four of five counts. I was at the trial. My client Paul was the first witness. The lawyers actually called me out as if I'm some evil person. It was very fun. The courtroom was packed. It was. There were people all around with cameras. It was actually kind of a fun thing to be part of that down in New York for about a week. The trial went on for two months, though he was ultimately convicted. And then just yesterday, he was sentenced to four years, a million dollars fine and restitution to be determined. So that's a big deal. The company sued him. They won that case. I think it's $130 million verdict against him in an arbitration. And now the SEC also has a case against him. And they, the company settled the case with the sec. Trevor Milton has not yet resolved that case. The pressure that's going to start up now, what the SEC does in these criminal cases is they back off and they wait for the criminal case to finish and then they start their case. So there's going to be fines and penalties. I mean, this guy is toast. I mean, he's got no credibility. I don't know what he'll do. But he still has a lot of stock. He still has, as far as I know, a few planes. He's still a very wealthy guy and is continuing to live this extravagant lifestyle. My understanding is during the. Someone told me this, I don't know who, but that he put up his whole family in the Four Seasons during the trial. The whole time. For two months.

John Dehlin [01:46:11] I mean, it was for two months. His whole family.

Mark Pugsley [01:46:14] Ridiculously, he just spends money like nobody's business. What I've heard, because he's about to

John Dehlin [01:46:19] be in prison forever or at least for four years.

Mark Pugsley [01:46:22] Well, and he's gonna. But he's gonna appeal it and try to delay it. So the judge did not put him in prison during the penalty of the appeal. So he's gonna be out for a while. And who knows if he'll disappear. If he tries to disappear, then they're gonna put him in jail. That's what happened to Elizabeth Holmes is they found out that she was trying to leave the country while she was on bail, and they pulled her back and then the judge incarcerated her as soon as the verdict came out.

John Dehlin [01:46:47] And unfortunately, he can't get pregnant like Elizabeth Holmes.

Mark Pugsley [01:46:49] Yeah, that was a good one. Well, but this, this brings me to the sentencing. So, I mean, we still have to

Sexual Abuse Allegations and Legal Fallout

John Dehlin [01:46:56] talk about the abuse.

Mark Pugsley [01:46:57] No, we're not there yet. Okay, let me go back a little bit because. So the sentencing. Well, let me. Let me tell the sentencing because it has a good. Some good aspects. And then we can talk about what happened after it blew up. Kind of the same thing that happened

John Dehlin [01:47:09] because there's still a Sean Reyes connection that we gotta talk about and the

Mark Pugsley [01:47:12] Tim Ballard connection, right?

John Dehlin [01:47:13] Yeah.

Mark Pugsley [01:47:15] But I wanted to just say that in advance of the sentencing yesterday, Milton's lawyers filed a bunch of paperwork to say what a wonderful guy he was. And without getting into all of it. You can find it. It's online. One of the things they said was they wanted to talk about how charitable he was. And they said to him, they said, well, he paid his church tithing regularly. Someone asked in the chat, is he paying tithing? The answer is yes. As far as we can tell, he gave the church stock instead of cash. He gave them, I believe, 26 million shares of stock in the company, which the church then sold for what we understand to be a significant profit, even over that. So the stock went up. The church doesn't hold stock anymore. They sell it, and they made a lot of money on the stock that he gave them. And then they also talked about how he had spent two years, you know, serving people in Brazil on his LDS mission as if he was a super charitable guy. I personally don't see that as charity, but, you know, whatever.

John Dehlin [01:48:20] By the way, the church would have sold that loser onto other people right when they resold the stock.

Mark Pugsley [01:48:24] Yeah, someone else would have bought. Bought it and it would have.

John Dehlin [01:48:26] Some sucker would have bought it from the church.

Mark Pugsley [01:48:28] Yeah, yeah. It's usually through the market, though. I want to. So I have kind of a semi transcript of what Trevor Milton told the judge before he got sentenced. And the problem is I don't have the full transcript. This is like a Twitter feed. There was a guy live tweeting it, but he did say a few things. He was sobbing. I feel terrible for everyone involved. I had amazing parents. I'd like to give you detailed examples of who I really am.

John Dehlin [01:48:59] This is Trevor Milton yesterday. Do you know if there's video or audio of him?

Mark Pugsley [01:49:03] No, federal court doesn't allow video. There will be a transcript at some point, but it takes a while to get there. So what I have is a limited transcript that was done by a guy who was there at the hearing.

John Dehlin [01:49:14] Okay, keep going. Sorry, I didn't mean to interrupt.

Mark Pugsley [01:49:16] That's right.

John Dehlin [01:49:18] So you can start over if you want.

Mark Pugsley [01:49:19] I ask you to open your heart. He's talking to the judge. The Bible says, God looks at the heart. Please listen to the end before deciding. As I reflect on my heritage, he pulls out a box of tissues. Sorry, you, Honor, I've never had to talk about these things before. I am one quarter Cherokee. There was ethnic cleansing against my ancestors. By the way, the judge is Hispanic, so I think he's. Anyway, I don't know.

John Dehlin [01:49:43] Plus, isn't Trevor super white.

Mark Pugsley [01:49:45] Very, yeah. My people were driven into Oklahoma. The trauma is visible on reservations. Hi, people. The generational trauma ended with my mother. She refused to pass it down to her children. From the time I was young, I had an unusually tender heart. In third grade, I saw where the red fern grows.

Guest 2 [01:50:05] I cried.

Mark Pugsley [01:50:06] This is true. I am not making this up, people. I cried and others laughed at me. I knew I would never be understood. Then my mother got sick. There was morphine for cancer. The doctors removed my mother's breasts. She was bald. My father sold our homes. Our garage was empty. Contrary to the hundreds of articles by the fake media, I was not entitled. There are some moments I've never even told my family about. My mother told me how beautiful heaven is. Is she'd visited. So she had a near death experience.

John Dehlin [01:50:39] That's very on brand.

Mark Pugsley [01:50:40] My mother said there are colors in heaven that don't exist on earth. Your purity is broadcast in colors. For the first time in my life, this is in court, people. This is not like him rambling. This is in court, in federal court in New York. He's saying this stuff. Let's see. Excuse me. For the first time in your life, you are reviewed totally in heaven. I guess those who sought destruction were filth. The process of repentance can take thousands of years. On the other side, it is called hell. Each decision is broadcast to billions of God's creations. Our ability to absorb information is almost infinite. From that point on, I remember everything. I actually don't know what he's talking about. But this was what he was trying to tell the judge then. And he talks about anyway that there's lots of innocent people in prison. Kind of insinuating, I think, that he was innocent. He was framed. Let's see. Reuben Carter, one of the greatest African American boxers, was framed. He was found guilty by a jury too. In 1995, black and Latino teenagers were convicted right here in New York City. Those reputations were destroyed. Then DNA exonerated them. So he's talking about the Central Park Five. I think there's an estimated 20,000 innocent people in prison today. So he goes on and on. Then he talks about how his arm almost got cut off by a glass door. And then he goes straight to the judge's Hispanic character. No more could I strip your honor's heritage from you than you could find ill in my heart. I had no tutors. While others played polo, I went to the favelas. Is that.

John Dehlin [01:52:23] That's like slums in Brazil.

Mark Pugsley [01:52:25] Okay, there you go. He wasn't Playing polo, because that was the option. Go on a mission, play polo. But I have compassion. This is my calling. On earth, it is difficult to get into heaven. I did not commit these crimes. It is impossible for me to purposely hurt others, to take what is not mine. Then he goes on and on about his mission. I chose to do what was right. I saved millions. After I paid taxes, I gave back. I started Nikola, because this is the guy that says, I don't give a shit about the environment. By the way, here's what he said. I started, Nikola, because I wanted to leave this earth cleaner than I found it. I single handedly charged the vehicle, changed the vehicle industry, hence why I always spoke in the present tense. I funded the company when no one else would. I took out hard money, loans. I was not a very seasoned CEO. And then he goes on about his family and. Anyway, anyway. And then at the end he says, let me stay with my wife, your honor, because his wife's had some real medical problems.

John Dehlin [01:53:25] So anyway, so like he thinks he's not gonna go to prison for all this?

Mark Pugsley [01:53:30] I think he was just pleading for bail. He didn't want to get a sentence because he knows that this, I mean, his lawyers, I'm sure, have told him that it's gonna be very hard for him to get this reversed on appeal. So he's trying to get the smallest sentence he can. The problem from my perspective, is four years isn't a ton. And if he walks away with $100 million in cash or stock, then how is that punishing this guy? I mean, if you could have 100 million, would you go to prison for four years?

John Dehlin [01:53:56] I don't know, 600 million. Do we know how much he has?

Mark Pugsley [01:54:00] We don't know exactly. We know he has a lot of stock. We know he's got a lot of legal problems now and he's probably going to eat it. Most of it will get eaten up. But yeah, he's.

John Dehlin [01:54:08] Could he have offshore accounts, hidden money?

Mark Pugsley [01:54:10] Yeah, he's got $32 million ranch that the government is trying to seize. He's got this other one in woodland. He's got lots of assets. He's got this place in the Turks and Caicos. He's got some nice stuff. And if he just goes for four years, federal penitentiary is not so bad. Who knows, maybe he'll be fine.

John Dehlin [01:54:30] Would it be like in a white collar prison? Maybe he'd be different than a.

Mark Pugsley [01:54:33] Very much so.

John Dehlin [01:54:34] Yeah, yeah, yeah. So just.

Mark Pugsley [01:54:38] And I guess crime pays, John.

John Dehlin [01:54:39] I sometimes. Why call it white collar Crime can pay.

Mark Pugsley [01:54:42] Yes.

John Dehlin [01:54:45] And again, it's mind blowing that he hurts so many more people and yet he gets a lighter sentence than Elizabeth Holmes.

Mark Pugsley [01:54:52] Yeah. He didn't ever have a public company. Yeah, I think it's crazy to me, too.

John Dehlin [01:54:56] But, you know, what was the judge thinking? Like, did he buy this object story?

Mark Pugsley [01:55:00] Like, I don't know. I don't know. I don't know.

John Dehlin [01:55:04] Yeah. Well, you know, as if this all weren't enough, it actually gets worse.

Mark Pugsley [01:55:10] Yeah.

John Dehlin [01:55:11] So don't go away. Like, it turns out he also, after all of this falls apart, people finally. Well, feel. No, it turns out that during some of this, while some of this is going on, allegations of sexual abuse arose about Trevor Milton. And that was before it all fell apart, right?

Mark Pugsley [01:55:32] No, no. Well, I think the story, it was after, I think it was right after that these people start coming out of the woodwork right after he stepped down.

John Dehlin [01:55:39] Okay, got it.

Mark Pugsley [01:55:41] So he was exposed. And I, I hope I'm getting that timing right. But the. You've got, I think one of the articles I'm about to play.

John Dehlin [01:55:47] Clip. Yeah, yeah, yeah, yeah.

Guest 3 [01:55:50] So.

John Dehlin [01:55:50] So, I mean, so it turns out in addition to all of this fraud, he was also accused of sexual harassment. So I'm going to go ahead and play the clip of that really quick.

Guest 2 [01:56:03] Same CNBC pressure today comes following a CNBC.com report involving two women who are accusing former Nikola chair Trevor Milton of sexual abuse. One incident dating back to 1999, the other one dating back to 2004. A representative for Trevor Milton denies the allegations, telling CNBC Mr. Milton strongly denies these false allegations. At no point in his life has Mr. Milton ever engaged in any inappropriate physical contact with anyone. And again, that's a spokesperson for Trevor Milton. All of this happens separately while we are looking at General Motors and wondering, will the GM deal close? Remember, GM is scheduled to take an 11% stake in Nikola. The close date was announced as September 30th. General Motorsport said whether or not it's going to close by the 30th. A statement from the company saying our transaction with Nikola has not closed. We are continuing our discussions with Nikola and we'll provide further updates when appropriate or required. So we'll be watching this over the next couple of days. And all of this raises questions about former GM Vice Chair Steve Gursky, who is now the chairman of the Nikola. He was one of the instrumental players in putting together the Nikola SPAC IPO and then guiding the company through its agreement with General Motors. We have reached out to Nikola, we have not heard any comment from the company regarding the status of its discussions with General Motors. But no doubt, David, this is going to be one of those stocks that people are going to be focused on to see if does GM go through with the deal? Do they change the terms, perhaps make it a little bit more.

John Dehlin [01:57:39] Maybe it's after the deal was announced,

Guest 2 [01:57:40] but before final questions.

Mark Pugsley [01:57:42] But if Gursky was running the company, that means by that point, Trevor had already been done around. The due diligence that GM did sort of suggests that GM went in, found that their technology, GM's technology was actually in some cases superior, but that it was Nikola that had access to the capital that was going to be necessary to get this broader effort off the ground. Does that sort of match your understanding?

Guest 2 [01:58:06] That's my understanding as well. And what's interesting about that, Carl, if you think about it from General motors perspective, the 11% stake in Nikola, that was the flyer here. That was going to be the element of this deal that could pay off. Yes. Getting size and scale for both the ultium electric vehicle battery technology, as well as providing hydrogen fuel cells to the semi that Nikola is developing. Those were important elements of this as well. But, but keep in mind, GM did not put any money out on this. So if this deal falls apart, if GM decides to walk away, they're not out anything aside from obviously the reputational hit that they'll take for people who will say, look, you should have done better due diligence to realize everything that was involved with Nikola.

John Dehlin [01:58:47] By the way, they don't mention anything about sexual abuse. No, they just only talk about the business ramifications. And I don't know, is there some difference between when the deal was announced and when it was finalized and when he was ousted? Because clearly when that GM exec was appearing on CNBC with Trevor Milton, that was before. That had to have been before the sexual.

Mark Pugsley [01:59:08] Two weeks.

John Dehlin [01:59:08] Two weeks before.

Mark Pugsley [01:59:09] Okay, so I in, hopefully we have all this timeline.

Guest 2 [01:59:13] Right.

Mark Pugsley [01:59:13] But the point is that at some point, I think that the sexual issues came out after Trevor had already stepped down. That's my recollection because I remember being surprised. And these, both of these girls, they didn't say it in that report, John, but both of the girls were, who've come forward were 15 when they say he sexually assaulted them. I have no knowledge one way or the other about those allegations. They are what they are. But that was quite shocking to have that come out.

John Dehlin [01:59:43] Yeah, yeah.

Mark Pugsley [01:59:44] And then there was this next one.

John Dehlin [01:59:45] Yeah, yeah. And then if that weren't bad enough. It gets worse because it turns out that there was at least one former associate who tried to be a whistleblower to Utah's Attorney General, Sean Reyes.

Mark Pugsley [02:00:00] Well, initially to Holiday City, I think it was.

John Dehlin [02:00:02] Okay. Yeah.

Mark Pugsley [02:00:03] So he came, he tried to report. Yeah, he tried to report some of this inappropriate sexual activity that he claimed he knew of. And he had text messages about it. He was gonna report that to Holiday City. And then I guess there was some allegation by Trevor that he was trying to blackmail him. And then all of a sudden, this is kind of crazy because this in my experience, doesn't happen very often. All of a sudden, this guy gets arrested. Not by Holiday City where he was talking to, but rather by the state. The Attorney general somehow reached into Holiday City. Sean Reyes, who we believe is a friend of Trevor Milton's. He certainly runs in the same circles. He reached in, took over the case somehow and then put this guy, his name is Johnny Robb, R, O, B B. He was put in jail in. In somewhere in Salt Lake City and then ended up committing suicide.

John Dehlin [02:01:00] Yeah, dying by suicide. And we're going to show that clip right now. Okay. So this is, you know, a trigger warning discussion of completion of. Of suicidality. Heartbreaking story. And it doesn't just reinforce, I guess, how awful Trevor Milton appears to be, but just how corrupt Utah's Attorney Attorney General's office and or Sean Reyes appear to be. If these allegations, along with the Tim Ballard. Our allegations. Allegations prove true. So I want to be careful.

Mark Pugsley [02:01:38] Yeah, I want to. I'm not. You know, you can. You could. You need to be careful about this. None of these are proven.

John Dehlin [02:01:44] It is very.

Mark Pugsley [02:01:45] Right, right, right. I'm just. Because I'm a lawyer, I always want to be careful about this stuff. But they are allegations. But it's very unusual for me for the state to reach into a city case, pull jurisdiction out and then put someone in prison. Not the one, by the way, who is the sexual assaulter. The one that is accused is Trevor Milton. But for some reason, the Attorney General puts the accuser, this Johnny Robb guy, in jail. Why. Why did that happen? Why did they take the case over in the first place? It's very odd.

Political Connections and Community Impact

John Dehlin [02:02:15] And then it's gonna. You're gonna note that it talks about Trevor Milton donating to Sean Reyes's political reelection fund.

Mark Pugsley [02:02:21] It's a coincidence, John.

John Dehlin [02:02:22] Well, we'll see. Yeah, maybe. All right, let's go ahead and roll the. The tape. This is sad.

▶ Video Clip 9

Video Clip 9 [02:02:27] At a rich social life. And even though he did not come from money. He also made rich friends.

Video Clip 9 [02:02:33] He had mentioned he had a friend that was starting up a company. And this is John. To do something with electric trucks.

Video Clip 9 [02:02:39] Trevor Milton, the founder of Nikola Motor Company, is a billionaire. In 2019, he set a real estate record, purchasing the most expensive home in Utah.

Video Clip 9 [02:02:50] I remember Johnny said, one day, I'm

Video Clip 9 [02:02:52] sure he'll be really wealthy.

Video Clip 9 [02:02:53] But according to Johnny, as the two spent plenty of time and trips together, he started to learn how Trevor treated women.

Video Clip 9 [02:03:03] I definitely opened up to him about

Video Clip 9 [02:03:05] a lot of things.

Video Clip 9 [02:03:05] Nothing that I've ever worried Trevor would come back and would be anything criminal.

Video Clip 9 [02:03:10] Johnny told police Trevor's behavior was worse than he describes. And as their friendship became more distant, Johnny says the things he knew aided him.

Video Clip 9 [02:03:22] Dude, I've hung on to every dirty criminal secret with women that you've ever done.

Video Clip 9 [02:03:27] Dude, you've got, like, thousands of skeletons

Video Clip 9 [02:03:29] in your closet, and these skeletons want justice.

Video Clip 9 [02:03:32] I'm bringing it all out, dude.

Video Clip 9 [02:03:33] The truth.

Video Clip 9 [02:03:34] All of it.

Video Clip 9 [02:03:34] Every little bit of it.

Video Clip 9 [02:03:35] Now, first, Johnny threatened to post screenshots of inappropriate messages Trevor sent to women. Then he accused Trevor of sexual assault and trying to pay women to have sex while he watched.

Video Clip 9 [02:03:48] The worst thing I ever did in my.

Video Clip 9 [02:03:50] In.

Video Clip 9 [02:03:50] In my life was tell these girls to go hook up with other guys.

Video Clip 9 [02:03:54] Eventually, Johnny and Trevor started exchanging messages on Instagram. And then Trevor reported Johnny to the police, accusing his former friend of blackmail.

Video Clip 9 [02:04:04] He was asking for half a million dollars.

Video Clip 9 [02:04:07] Just so we're on the same page, Is that. That for this to work, you've got to be totally upfront about your relationships,

Video Clip 9 [02:04:16] about anything that he might have on you.

Video Clip 9 [02:04:19] We.

Video Clip 9 [02:04:19] We do need to know that, okay?

Video Clip 9 [02:04:21] I never offered these girls to hook up with me, not once.

Video Clip 9 [02:04:24] Even though Trevor originally reported Johnny to the Summit County Sheriff's office, the Utah attorney general took over the case.

Video Clip 9 [02:04:32] Park city, right?

Video Clip 9 [02:04:32] On April. April 16, 2020, Jonathan Howard Rob was arrested in Murray for extortion in a sting operation set up by special agents.

Video Clip 9 [02:04:43] Wait till you read what he's done to women, bro.

Video Clip 9 [02:04:45] It's justice, dude.

Video Clip 9 [02:04:46] According to these recordings from the Utah attorney general's office, when Johnny spoke to them, he argued the money was Trevor's idea, A deal to prevent him from releasing more damaging information.

Video Clip 9 [02:04:58] He.

Video Clip 9 [02:04:59] He described the $500,000 as a settlement, not blackmail.

Video Clip 9 [02:05:04] I just have a bank full of this stuff, and he knows it.

Video Clip 9 [02:05:07] How are we supposed to believe that that's true?

Video Clip 9 [02:05:10] You got my phone? Go grab my phone. We'll pull it all up. Just hang on to it, okay? Just hang on to it. Let this all blow over. Once this is all blown over, do whatever the hell you want with it.

Video Clip 9 [02:05:21] Special agents declined Johnny's invitation to look through the map messages together on his phone. He spent the next 20 days in jail.

Video Clip 9 [02:05:30] I'm going to win this thing and I'm just suffering here until we can get this show on the road.

Video Clip 9 [02:05:35] When I asked him, why did you do this? He said, dad, you don't know how bad of a person, how many people he's hurt. I said, but this isn't how you do it. I taught you differently.

Video Clip 9 [02:05:45] The day after his release, Johnny died by suicide.

Video Clip 9 [02:05:49] I thought, oh, okay, well, he's gonna let us help him get the help he needs. And we didn't get that opportunity.

Video Clip 9 [02:05:59] Two months later, Trevor Milton made his first ever contribution to the re election campaign of Attorney General Sean Reyes. $15,000. Leaving Johnny's friends and family asking why the AG's office took over the case. When we asked about the sexual assault allegations, a spokesperson for the agency said our interest was the extortion case, period.

Video Clip 9 [02:06:23] It makes us want to know, was there more to the story than what we were provided.

Video Clip 9 [02:06:29] We first informed the Attorney General's office we had questions about the case on September 24, 2020. The next day, Sean Reyes campaign refunded the $15,000 donation. Given the current allegations, and although at this point they are only allegations, we felt it best to return the recent donations.

Video Clip 9 [02:06:50] It feels really vulnerable talking about it.

Video Clip 9 [02:06:53] Since Johnny's death, three women, including Trevor Milton's cousin, have accused Trevor of sexual assault. This photo is from when they were children.

Video Clip 9 [02:07:02] He goes, well, yeah, I'm in a class, it's a massage class and everybody takes a off their shirt during massage.

Video Clip 9 [02:07:09] Aubrey Smith says she was 15 years old, Trevor was 17.

Video Clip 9 [02:07:14] And then he goes, yeah, in my class, the. The girls always take their bras off because the straps get in the way. And I froze. And as he said it, he undid my bra and took it off and he groped me and somebody eventually knocked off the door.

Video Clip 9 [02:07:34] The statute of limitations in her case has run out, but investigators still documented their findings in a police report.

Video Clip 9 [02:07:41] I never worked for him another day and I went home ashamed.

Video Clip 9 [02:07:47] Alison was also 15 years old when she worked for Trevor in St. George and says she was assaulted. She asked us to not show her face or full name for privacy reasons.

Video Clip 9 [02:07:58] My boss, he was my ride home.

Video Clip 9 [02:08:00] He was.

Video Clip 9 [02:08:01] I was much smaller than him. I just wanted to go home. He knew he had done it. He had Bragged to other people, and that's how my story came out. He was trying to glamorize the situation, make it sound like it was hot.

Video Clip 9 [02:08:14] Tyler Winona, another former friend of Trevor Milton, says he views his experience as very similar to Johnny Robb. He was interviewed by St. George PD, but Milton has never been charged.

Video Clip 9 [02:08:27] Wish the prosecutors and police would. Would take these things a little more serious.

Guest 5 [02:08:32] As more allegations came in, Trevor Milton stepped down as chairman of Nikola Motors. He was also dealing with a fraud investigation involving his company, in which a jury eventually found him guilty.

Mark Pugsley [02:08:45] More needs to be done to hold Trevor accountable.

Guest 5 [02:08:47] Aubrey said she never heard of Johnny Robb until after sharing her story. She still wants to know why the Attorney General's office treated Trevor Milton as a victim, not a suspect.

Mark Pugsley [02:09:01] They have a responsibility to look into it deeply and to give weight to what Johnny was saying. It's heartbreaking for me because I think he was really brave

Guest 5 [02:09:17] before his arrest. We spent several months in contact with Trevor Milton's PR team at the time, he simply said, quote, I intend to defend myself against false allegations leveled against me by outside detractors. Live in studio Tonight, Adam Herbetz, FOX 13 News, Utah.

John Dehlin [02:09:39] The Salt Lake Tribune, I think, was accepting nominations for like, Utah of the Year kind of thing. Shouldn't Adam Herbitz be. That guy is everywhere.

Mark Pugsley [02:09:51] He's done a great job.

John Dehlin [02:09:52] He's over Sean Reyes. You know, Tim Ballard, our. He's just Johnny on the spot. And I just want to give a per. I don't know if he'll hear this. I hope all of you will just email Adam Herbert's and say thank you, Adam, for the reporting, the investigative journalism you do for Utah. Tell him John Dehlin gave me a huge shout out on Mormon stories because that dude is a hero as far as journalism goes in Utah.

Mark Pugsley [02:10:15] Well, and I want to say one other thing, and that is, you know, we talked about this a little earlier, John, but, you know, these. I'm just looking at the chatting and people are saying, why didn't these girls come forward sooner? And, you know, this is a powerful guy. He is well known. He's now a billionaire. He has been a billionaire until recently. And it is very scary thing to take on wealthy, powerful people. You look at what Epstein, Jeffrey Epstein got away with for all those years, year after year, even after he was a sexual, you know, like a sex offender, registered sex offender, he still was getting women brought to him in different ways and he was assaulting them. It's powerful. People are intimidating and I, I feel for those Victims and I'm sorry this happened to them.

John Dehlin [02:11:00] Yeah, yeah. So, I mean, I guess there's different ways we could kind of wrap this up. But the one question I think that is maybe the most important question for Mormon Stories podcast is in your, you know, you've been, you've been investigating and whistleblowing Mormon related affinity fraud and fraud for decades now.

Mormon Affinity Fraud and Utah's Fraud Culture

Mark Pugsley [02:11:24] Yeah.

John Dehlin [02:11:25] I would say you're the world's number one guy for Utah related.

Mark Pugsley [02:11:29] The world. I don't know.

John Dehlin [02:11:30] I mean, I. Affinity fraud in Utah? Come on.

Mark Pugsley [02:11:33] I don't know. I just like to help people. I mean, being a lawyer is not very rewarding sometimes, but I get a lot of. I get a lot of satisfaction out of helping people.

John Dehlin [02:11:43] Well, the point, the question I wanted to ask is to what extent is this a Mormon story and is this a Mormon phenomena? If you can just freeform. I didn't ask you to prepare for this. What are the doctrinal, historical, theological, cultural, legislative factors that are Mormon that allowed this story and that allow so much affinity fraud, apparent Attorney General, abuse of power, you know, unhealthy MLMs? What is it about Mormon culture, history, doctrine, theology, practice, legislature, etc. That enables all this? Is that a one minute question? No, that's a five minute question.

Mark Pugsley [02:12:33] A whole nother podcast. We did a podcast and it's interesting. We did it some years ago and I think it was called affinity fraud or something, I can't remember. But my thinking has evolved about it since then and I think there's a number of factors. I'll just go through them quickly. One of them is the church is not vocal enough. I have called out the church and I'll do it right now. Again, the LDS Church should have records, letters, read over the pulpit, in general conference and in the wards, saying that just because someone is going to church with you doesn't mean you should invest with them, that you should verify investments, not just trust. That's a problem. Other. In terms of LDS theology, the Mormon Church absolutely has a prosperity gospel going on. I mean, there's no question in my mind, having spent 45 years in the church, that the church emphasizes culturally at least, that if you're righteous, you will be successful in life. And so people feel like the wealth and having nice cars and having nice houses is somehow some sort of manifestation of their righteousness, which is ridiculous, by the way. There's another one I want to talk about, which I haven't really talked about much. And that is the gift of discernment. And this is something that I think is really problematic in the church. You've talked about it with respect to sex abusers. And one of the reasons I think the church doesn't acknowledge the extent of sex abuse in the church is because especially when it comes to leaders, they're put into being the scoutmaster or the bishop or the young men's president or whatever, purportedly by inspiration. And so if the church acknowledges that inspiration doesn't work, they can't do that, right? Well, that's problematic because then it enables these people to continue to abuse others. And that applies to investing as well. What happens in the investing world is that people are looking for money like Trevor did in the early days. Most all of his investments came from, excuse me, his investors came from his ward or people, people he knew through his relationships at church. And they didn't do a lot of research. They trusted Trevor. They thought he was a nice guy. They enjoyed him. I've told you this before, John. I've had cases where people were solicited for an investment in the celestial room of the temple. I've had cases where we had a case once where a stake president was defrauding all the members of his stake. And of course they all thought he was great because he was the stake president. I had another case where the financial clerk defrauded people in the ward because he knew that people had information. He had the information about their tithing receipts. So he solicited investments from the people he knew had the most money in the ward. So this church has a problem with fraud and culturally it's complicated. I think it is going to depend. Did Trevor Milton become who he was? Which is, I believe my personal view is that he's a compulsive liar. I mean he really cannot tell the truth. And he's done that his whole life. Is that church. Can you blame the church for that? I don't know. Maybe he lied about whether he touched himself to his bishop and it started from there. I don't know. But there is something about that. There's something about the end justifies the means and there's something about the prosperity gospel. And then people who trust someone because they go to church with them and think that they must, they're a good person, therefore the investment that they're soliciting or the loan is a good investment. And so that's the stuff I keep trying to stop. That's the thing I try to talk about to people. And I would encourage anyone who hears this to please talk to your parents and explain to them if they have some weird investment that pays 10% a month or 20% a year or something that sounds too good to be true, please just talk them out of it. Help them learn that this is not safe and that those kind of returns are not real. Because what's happening is people, there are wolves in sheep's clothing throughout congregations all across the Wasatch front. And that needs to be combated somehow. The church is not willing to combat that. So how do we do it? I don't know the answer. Other than talking about it.

John Dehlin [02:16:53] You would think it would be the Mormon churches, to the Mormon Church's benefit to not have Utah be the scammy fraud capital of the planet and that they would not want this. All this bad pr. So, like, I wonder why they wouldn't shut up.

Mark Pugsley [02:17:06] One after another and they all run together. I mean, we have a picture here of.

John Dehlin [02:17:10] I'm going to show this right now. So here's the picture. Tell people what they're seeing here.

Mark Pugsley [02:17:14] This, this is. This is a picture of.

John Dehlin [02:17:17] Who's Aaron Wags?

Mark Pugsley [02:17:18] First of all, Aaron Wagner is a kind of a bro. I mean, I don't know him. We found this on his social media accounts. It's out there for anyone to see. He was part of a group that did, I think something called Alpha Con last year. It was hilariously Utah, where they brought some guys with flat brimmed hats to come and talk about how good of businessmen they are and how you can be like them and you just have to pay money. So Aaron Wagner owns a bunch of restaurants in town, Dirty Birds, I think he owns. And he owns some other Las Boteas. I think he's an investor or an owner of that. So he's an influential guy. But he runs in these same circles, by the way. I'm not saying there's anything about Aaron Wagner other than he runs in these circles. I don't know. I'm not aware of anything that he does that's illegal or fraudulent. I just want to put that out there. But this picture is interesting because it shows Trevor Milton.

John Dehlin [02:18:14] So wait, Trevor Milton's on the left?

Mark Pugsley [02:18:16] Yeah, on the left.

John Dehlin [02:18:17] And then for those who are listening, who else is in the picture?

Mark Pugsley [02:18:21] Well, right next to him is Aaron Wagner.

John Dehlin [02:18:22] No, no, right next to him is Tim Ballard.

Guest 3 [02:18:24] Right.

Guest 1 [02:18:25] Oh, Tim.

Mark Pugsley [02:18:25] I'm Tim Ballard. Sorry, sorry. Yeah, Tim Ballard. And then there's a guy next to them. These. These all have girlfriends with them. Next to him is a guy named Jimmy Rex.

John Dehlin [02:18:33] Yeah, And I'm friends with Jimmy. I've been on Jimmy's podcast.

Mark Pugsley [02:18:36] Okay, so that's Jimmy Rex next, right? And then I think next is a guy, I think that's Heavy D. The Diesel brothers. I believe that's who that is. And then on the far right is Aaron Wagner.

John Dehlin [02:18:47] And the only dude missing from that is freaking Sean Reyes.

Mark Pugsley [02:18:50] He probably took the picture. I don't know. Yeah, these guys all run together. I mean, I don't know how they all know each other. I know they all drive exotic cars. And I think that there is a exotic car culture in Salt Lake where a lot of these guys get to know each other.

John Dehlin [02:19:04] Yeah. Yeah. And I mean, I, I again, I, I want, I want Utah to do well. I want the Mormon Church to just be healthy, happy place. I, I want these people and their families. I have, I have no ill will towards Jimmy or even freaking Tim or Trevor. But there's something in the water, dude. There's something in the Utah bro tech culture water. Along with all the prepper, apocalyptic NDE visions of glory stuff. We've got some cultural sickness.

Mark Pugsley [02:19:38] And you forgot crypto. We have a lot of crypto going on right now. Several of them have been sued by the sec. One called Nerds. Another one called or no, Green. Excuse me, Green. Another one recently was Nerds. I guess it was. But anyway, there's some of those that are being shut down now. But there's a whole crypto culture also that I think is problematic. That's a whole nother day.

John Dehlin [02:20:02] Yeah. Well, again, you know, I do want to just make a final clarification that people are innocent until proven guilty. It looks like Trevor Milton was proven guilty, at least for the fraud stuff. But you know, maybe I'm wrong about Sean Reyes. Just allegations, allegations. And sometimes people do falsely accused. And so that's why I love the law. Right. And that's why I love evidence and that's why I love facts.

Mark Pugsley [02:20:32] Get it right all the time. The DOJ doesn't get it right all the time, that's for sure. And allegations are allegations and the legal process will work through its process. And I really have nothing to do with that. All I know is that people need to think about where they put their hard earned money. That's, that's. They need to be very careful who you give your money to.

John Dehlin [02:20:51] But also there's a, there, there's a criminal justice problem potentially in Utah. Whether it's the, the multiple reports against Ruby, Frankie and the eight passengers family. The, the multiple reports against Jody Hildebrandt, who was the therapist to The Frankies, you know, the, the allegations against Tim Ballard and how Sean Reyes apparently allegedly shut all that down to protect Tim Ballard. And our. And with this Trevor Milton stuff, it's like, where is the law enforcement? Where's the judicial process to stop this stuff early? And why is it that the. The money and the people in power and even, apparently law enforcement officers sometimes, and even the Attorney General's office allegedly are defending the perpetrators and sometimes even prosecuting or punishing the victims? Like there's a. Isn't there a criminal justice problem maybe in Utah that needs to be looked at?

Mark Pugsley [02:21:54] I mean, I think these. A lot of these state agencies don't get the funding they should. The. The Utah Division of securities is like the SEC on the state level. They don't have the funding they need. I know that Sean Reyes is, you know, he came into office pledging that financial fraud was one of his highest priorities. And I think that they've done a decent job taking these folks down. But apparently if you're a campaign contributor, then that doesn't apply.

John Dehlin [02:22:20] Well, no, Nicola, like Trevor Milton donated after Sean Reyes hooked him up, which is interesting. But you're saying Sean Ray. Okay, just to give credit where credit is due, you're saying Sean Reyes did make some progress on fraud.

Mark Pugsley [02:22:34] His folks. He's got folks that prosecute securities fraud in Utah. Yeah, the Division of Securities has Attorney General's office, people who prosecute those. And there have been good cases that they've brought to shut down. We had another situation. One of my cases involves the Kingston Klan that you recently interviewed, one of the women from. And. And they have been, you know, indicted and imprisoned for fraud on the US Government. That was pretty significant. Well, it turned out that they'd given, I think, $35,000 to the attorney General, so.

John Dehlin [02:23:11] Sean Reyes. Yeah, yeah. So if you want. I mean, what that implies, and I'm not saying this is true, is if you want to get out of crimes in Utah, donate to Sean Reyes in the Attorney General's office. Now, again, I'm not saying that's true. I'm saying that's what these dots seem to suggest.

Mark Pugsley [02:23:29] If you connect them, people could come to that conclusion. But the problem is this is the third Attorney General in a row that has stepped down in disgrace or in controversy at least.

John Dehlin [02:23:39] And he hasn't stepped down. He's just saying he won't run for

Mark Pugsley [02:23:41] reelection, he's not running for re election, but he's not running for Senate, presumably. And he was going to. So maybe he'll Run for governor. I don't know, but Sean is a political guy. He wants. Wants to keep running for office. I'm sure. I'm not sure who would hire him in these days. It'll be interesting to see where he ends up.

John Dehlin [02:23:59] Well, Utah Mormon Church. Governor Cox, like Utah Legislature, Clean up your fraud problem. Clean up your Attorney General's office, please.

Mark Pugsley [02:24:11] We hope the next one will be honorable.

John Dehlin [02:24:13] Yeah.

Guest 3 [02:24:14] All right.

John Dehlin [02:24:15] Well, any. Any. We've said a lot. We're two. Two and a half hours in, and that's actually short for Mormon story standards. So we're like. This is just like an infomercial, basically, or like a. Yeah, a blurb. This is almost a TikTok for Mormon stories standards. Any final words you want to.

Closing Reflections and Community Acknowledgment

Mark Pugsley [02:24:31] Yeah, I just want to say, you know, John, you and I have known each other for a long time, and I wanted to thank you for all you've done for this community. Many people. I left the church, I think, 12 years ago, and we've known each other, I think, much of that time. And I've seen how you've evolved and you've grown, and I'm just really grateful on behalf of all your listeners for what you've done to help people transition out of the church, because it's hard. And to those who I know who listen to these, and I don't know, it's way off topic, but I just want to say how great it is to leave the church. I just want to pitch it like all you people that are faking it in the church and pretending that you believe and you really don't get out, because guess what? There's a whole world out there, and I love it. And I've never been so happy in my life since I left the church. And all the horror stories and all the scary things people say are bullshit. It's actually great.

John Dehlin [02:25:30] But isn't that, like, fake happiness?

Mark Pugsley [02:25:33] Mark, my happiness is purely fake because

John Dehlin [02:25:35] wickedness never was happiness. You know that.

Mark Pugsley [02:25:38] Listen.

John Dehlin [02:25:38] You know that the great deceiver can imitate the true spirit of goodness.

Mark Pugsley [02:25:44] Listen, I just want to tell you, we just celebrated my daughter's wedding in Italy a few months ago. And all eight of my children. I have eight children, and all of them are out of the church. And we were all there dancing and celebrating. There was no temple anywhere for hundreds of miles, as far as I know.

Guest 2 [02:26:05] And.

John Dehlin [02:26:06] And it was so beautiful.

Mark Pugsley [02:26:08] Yeah, this was down in Amalfi. It was far away. But, yeah, I mean, I'm just saying, you know, it's just great. And There's a whole world. Brooke Lark. One of my first podcasts I ever listened to you of yours was Brooke Lark. And she said something.

John Dehlin [02:26:22] Brooke McClay at the time.

Mark Pugsley [02:26:23] Yeah, Brooke McClay at the time. And Brooke said something that I'll never forget. And she said what I didn't realize is I was living in a black and white world and now it's in Technicolor and it's so great. And I just am 100% on Lord with that.

John Dehlin [02:26:40] All right, well, that's a beautiful testimony.

Mark Pugsley [02:26:43] That's all I got.

John Dehlin [02:26:44] For those who might benefit from following

Mark Pugsley [02:26:48] your path, Mark, from us old timers who've paved the way really quickly.

John Dehlin [02:26:54] If someone wants to hire you, remind them how to get ahold of you and what type of work you would be hired for.

Mark Pugsley [02:27:00] Sure. And I just have to say this because last time we did this, I did get a lot of calls, and I can't take every case. And I just want to say that right up front, I try to be careful what cases I take. We have four lawyers that do this full time. That's all we do. But we have to be pretty selective because these cases are very hard and they sometimes take eight to 10 years before you even get paid. So I don't take everyone, but I'm happy to chat with people about their situation. You can find me on our website, pugsleywood.com and you can. Or Google my name. It'll come up. And I'm always happy to chat with people, especially people who work inside big companies, especially publicly traded companies. If you work in a brokerage firm, if you work in some sort of big trading firm and have knowledge of improper behavior, give me a call because those are the cases I particularly like. Smaller $50,000 losses are sad, but I really can't take those cases, unfortunately.

John Dehlin [02:27:58] Okay.

Guest 2 [02:27:59] All right.

John Dehlin [02:28:00] Well, Mark, we hope you come back again on Mormon Stories. We love having you. Our audience is thanking you for joining us.

Mark Pugsley [02:28:06] Thanks, everyone.

John Dehlin [02:28:07] And I'll just say thanks for joining us. If you enjoy these episodes, there's a couple things we could really use your help on. Please become a subscriber on YouTube. Please like this episode and share it. And most importantly, we couldn't do this work without our donors. So if you're a monthly donor, thank you. We couldn't do it without you. If you value this content, you're not a monthly donor and you want to see it continue. We lost a lot of donors in 2023 just because donors last about two years on average, and then they stop donating because they move on or they fall on financial hard times or whatever the reason is, they want to support something else. So we always need people to step up and support this podcast to keep it going. So you can go to MormonStories.org, click on the donate button, don't and become a monthly donor. And we'll keep trying to provide you with this content for as long as we can. Thanks to Julia for her work today, Brooklyn Gerardo and the Open Storage Foundation Board. Thanks to Maven for all she does. We've got a great staff, got a great board, and we've got more good stuff in the days, weeks and months ahead. I will say we're breaking a really big story tomorrow. Chelsea Goodrich, who was part of the AP story on the Mormon Church buying victims silence and protecting abusers. We have Chelsea Goodrich on Mormon Stories podcast tomorrow. And then we're going to be sharing the three secret audio recordings that she recorded of her negotiations with Ritting, Paul Ritting of the Mormon Church's restaurant risk management department. I don't know, for two or three decades. And then we're going to have an Idaho attorney. Come on and Colby, Colby Reddish, we're going to have him come on and do some analysis of Idaho law.

Mark Pugsley [02:30:06] And you know how poorly that was handled. As a lawyer, can I just say, that story just makes me shudder how poorly that whole situation was handled by that guy.

John Dehlin [02:30:16] So that's coming in the next few days. Merry Christmas. And we'll try and come up with some Mormon Stories episode prior to Christmas so that we don't lead you into Christmas with a really important but very heavy abuse story. So anyway, lots of cool stuff to come. Thanks for your support. Tune in again soon for another episode of Mormon Stories podcast. Be good to each other, be kind to each other, clean up the attorney General's office and avoid fraudsters. Thanks, everybody. Y' all take care.

Transcript © 2026 John P. Dehlin. All rights reserved. Brief quotations are welcome with attribution and a link to mormonstories.org; all other use requires written permission.