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Saturday, May 25, 2024 | Back issues
Courthouse News Service Courthouse News Service

Prison Expected for U.S. Fidelis Boss After Guilty Plea

ST. LOUIS (CN) - Four days after pleading guilty to state charges stemming from the collapse of U.S. Fidelis, the company's former president pleaded guilty to federal charges of conspiracy and tax fraud.

Darain Atkinson, 47, pleaded guilty to conspiracy to commit mail and wire fraud and filing a false tax return. He admitted he failed to declare or pay taxes on $13 million he received from U.S. Fidelis in 2006.

Atkinson admitted U.S. Fidelis tricked customers into believing that the auto service contracts he sold were actually extended warranties from the dealer's manufacturer. Up to 60 percent of U.S. Fidelis customers asked for refunds, but Atkinson admitted he told his employees to withhold up to 40 percent of the refund due.

U.S. Fidelis once was the nation's largest extended auto service dealer, until it collapsed in 2009. Atkinson admitted he funneled millions of dollars from the company to support his luxurious lifestyle, which led to the company's collapse.

Atkinson pleaded guilty last week to state charges of insurance fraud, stealing and unlawful merchandising practices, in St. Charles County Court.

In both the federal and state cases, prosecutors recommended a prison sentence of 8 years, to be served concurrently.

Federal sentencing guidelines for the crimes are 8 to 10 years in prison.

His federal sentencing is scheduled for July 12.

The state case against Akinson's brother, Cory, 42, is set for trial in September.

Cory Atkinson was indicted on similar federal charges on March 29 and is scheduled to turn himself into federal authorities on Thursday.

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.

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