Chesterfield Resident Sentenced to 40 Months in Prison for Tax Fraud

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

(Editor's note: The story has been updated to correctly display a photo of Cory Atkinson. A previous version of this story had a photo of his brother, Darain Atkinson.)

Chesterfield resident Cory Atkinson 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.

Kurt Greenbaum September 19, 2012 at 03:19 PM
How about this advise as well, Cory: "Be careful about how you treat customers, how much you flout telemarketing laws, how much you train your workers to browbeat potential customers into buying a service they might not need, how much you exploit loopholes in your contracts to avoid paying up on the service you sold them and how much you gild your personal living arrangements with 'business' expenses"?
your September 19, 2012 at 09:21 PM
I agree Kurt, I had friends work they're. And the stories they would tell were just unreal. Hanging up on customers wanting refunds and taking double payments etc etc. This was the modern day Boiling Room, apparently they showed this movie religiously throughout.
David September 20, 2012 at 04:37 AM
I think they made an "example" out of him, seems excessive


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