Thread by @InsiderNikola

Trevor's fraud didn't start with Nikola. The deal he inked with GM was the culmination of a decade of fraud. He started with a stolen patent, a family connection, and the balls to lie to Swift Transportation and leveraged it into what he has now. #NKLA #NKLAQ #Trevorgate

This is the story of dHybrid Inc. In late 2009, Trevor found out that a former neighbor of his was doing conversions of Diesel trucks to Diesel/Natural Gas hybrids. He got his pickup converted (rolled it a few months later, see my banner) and liked the savings.

Trevor suggested they go into business together and offered to help his friend patent his design. Instead, Trevor went and patented it in his own name and drove his pickup to Swift Transportation, a family member knew their CEO and put them in touch.

#Trevorgate #Nikolagate

Trevor talked those guys into a contract. It was a terrible contract--$16 million for 800 systems, barely enough to cover the cost of parts. But it came with a $2 million down payment which was supposed to cover development and the first 100 systems.

Trevor instead squandered the down payment--as soon as the check came in he started spending over $100k a month on ads for his uPillar.com website. Swift alleges the money was diverted, and at any rate within a year and a half the money was completely gone.

Instead of delivering 100 systems, by the time the money was gone he only had 5 test mules that didn't work very well. So he went back to Swift and talked them into giving him a loan for over $300k. Then defaulted on that. Completely screwed, he looked for a buyout.

He started pitching the company to investors. He didn't want his team to just be he and his dad and his lawyer so he listed a contractor who had worked for him as his CTO. Used his initials in the slidedeck so they couldn't look him up. Just completely bushleague stuff.

But he found a buyer, Sustainable Power Group, and in May 2012 they signed a term sheet buying him out, taking over the defaulted loan to Swift and giving cash to Trevor. But within a month they figured out he had sold them a con and exercised their termination clause.

He lied about everything. He lied about the fuel savings, the mileage, the fuel blend, the EPA certifications. The company was complete trash. Once that deal fell apart, both Swift and S-Power sued dHybrid Inc, and that was the end of the road for that company. #Nikolagate

Here's where it gets really crazy: his con having destroyed his first company, he and his dad just started a new one called dHybrid Systems, left his investors and partners behind with the dead company and just pretended it was all the same company.

Spent about two years pumping up dHybrid Systems until he found another mark, Worthington Industries, and sold the thing to them before they could figure out what they were getting. I heard about this all the time in my Nikola days.

The company was complete trash. Quality control was non existent and parts were falling off of trucks. Within about a year Worthington had to write off the division because they spent more money fixing the flaws than the division was worth.

But Trevor had a small window of time when he could leverage Worthington. He convinced them to invest in his new company, Bluegentech LLC (later Nikola Corp), started posing as a top Worthington executive and getting new partners to screw.