Atkinson Sentenced to Four Years in Prison on State Charges

After being sentenced on fraud charges in federal court last week, Chesterfield resident Cory Atkinson was sentenced to four years in prison on similar, state-level charges Friday. 

Atkinson is the former co-owner of one of U.S. Fidelis, at one time one of the country's largest marketer of auto service contracts. The business' other owner was his brother Darain Atkinson, who was sentenced to eight years in prison on federal fraud charges Tuesday. 

According to a report in the St. Louis Post-Dispatch, officials said the brothers used deceptive marketing technics to make customers think they were receiving more comprehensive warranties than they were. They then illegally funnelled money more than $100 million from the firm.

The setence is likely to run concurrently with the 40-month jail sentence Cory Atkinson already received on federal charges. He was also ordered to pay $4 million in back taxes. 

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. A press release from the Department of Justice 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.