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Atkinson Sentenced to 40 Months and $4 Million Restitution in US Fidelis Tax Fraud Case

Cory Atkinson co-owned U.S. Fidelis, at one time the nation's largest marketer of vehicle service contracts.

Cory Atkinson, co-owner of former Wentzville business US Fidelis, received a 40-month prison sentence and was ordered to pay $4 million in restitution to the IRS for his part in a massive tax fraud case.

According to a press release from the Department of Justice, Atkinson and his brother Darain Atkinson were co-owners of U.S. Fidelis, at one time the nation’s largest marketer of vehicle service contracts (VSCs). In June, Cory Atkinson pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of filing false tax returns.

Prior to 2009, the company was known as National Auto Warranty Services and made its money by marking up the price of the VSC, sometimes excessively. The press release laid out how Atkinson ran afoul of the law:

According to court documents, as part of a criminal conspiracy, in 2008 Darain and Cory Atkinson made fraudulent payments on behalf of VSC purchasers who were in default or likely to be in default so that US Fidelis / NAWS would receive its dealer profit when it was not entitled to receive such profit. 

In addition to the conspiracy charge, with his plea, Cory Atkinson also admitted that he filed a false tax return for the tax year 2006 that failed to include millions of dollars in distributions that he received from US Fidelis / NAWS.  According to the plea agreement, between 2006 and 2008, Darain and Cory Atkinson received millions in distributions from US Fidelis / NAWS, a substantial percentage of which funds were used to pay for their personal and non-business expenses.  For example, records from US Fidelis / NAWS indicate that in 2006, Cory Atkinson received distributions in excess of $14 million but reported no taxable income.  In 2007, Cory Atkinson filed a joint federal income tax return that omitted more than $1 million in taxable distributions from US Fidelis / NAWS. 

Cory Atkinson gave no statement during the sentence, but a report from KMOX states that he was asked by reporters outside the courthouse if he had learned anything about greed and temptation from his experience.

Atkinson reportedly responded with a warning, saying “Be careful how fast you grow as a company, and be careful what state you’re in, and be careful of their agenda.” 

Darain Atkinson pled guilty in April to one felony count of conspiracy to commit mail and wire fraud, and one felony count of filing false tax returns, and is scheduled for sentencing Sept. 25.

The brother lived a lavish lifestyle, maintaining estates in Lake Saint Louis and Wentzville.

READ MORE:

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your September 19, 2012 at 03:21 PM
“Be careful how fast you grow as a company, and be careful what state you’re in, and be careful of their agenda.” , SERIOUSLY!!, these goons knew exactly what they were doing. What a shameless apology for getting caught with their hands in the cookie jar. I hope they have a great 40 months, lets hope the feds find the remaining money missing in their Cayman accounts. this really Pi$$e$ me off.

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