ST. LOUIS (CN) – Hours after the former president of U.S. Fidelis admitted in state court that he defrauded consumers and his company of millions of dollars, federal prosecutors unsealed an indictment against him and his brother, stemming from the collapse of the auto service company.
Darain Atkinson, 47, pleaded guilty Thursday in St. Charles County Court to insurance fraud, stealing and unlawful merchandising practices.
It was part of a deal negotiated without the knowledge of his brother, Cory Atkinson, 42, who was U.S. Fidelis’ vice-president, the St. Louis Post-Dispatch reported.
St. Charles prosecutors recommended a sentence of 8 years for Darain Atkinson. A sentencing hearing is set for July 16.
But Darain Atkinson’s attorney, Scott Rosenblum, said in court that the state sentencing won’t happen until after the federal case is resolved.
Hours later, federal prosecutors announced an indictment accusing both Atkinson brothers of defrauding consumers, failing to pay taxes and plundering more than $71 million from the company to support lavish lifestyles.
Those lifestyles included mansions in St. Charles County, Lake Tahoe and the Cayman Islands, and luxury cars and boats, according to the indictment.
Just three years ago the Atkinsons were self-made millionaires as they headed the nation’s largest auto service contract company. But the brothers’ lavish spending put a strain on U.S. Fidelis’ finances, leading to the company’s collapse in 2009.
Cory Atkinson’s state case is still pending and a trial is scheduled for September. Lawyers for Cory and Darain Atkinson both told the Post-Dispatch that Darain Atkinson did not agree to testify against his brother or to provide information against him.
In exchange for the plea, 11 other state charges were dropped against him.
Both brothers have been in legal trouble before. Darain Atkinson was convicted in 1986 of theft, burglary and forgery and again in 1987 for making counterfeit reserve notes. Cory Atkinson has a felony conviction in 1987 for trespassing.