US Fidelis sentencing: Co-owner Darain Atkinson sentenced on tax and fraud charges

9:53 PM, Sep 25, 2012   |    comments
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Darain Atkinson

St. Louis, MO (KSDK) - The second of two brothers who operated a Wentzville-based auto service contract provider was sentenced Tuesday to eight years in prison, US Attorney Richard Callahan said.

According to court documents, 47-year-old Darain Atkinson pleaded guilty in April to federal charges of conspiracy to commit mail and wire fraud and filing a false tax return in 2006, resulting in a $4 million tax loss to the federal government.

Darain Atkinson's brother, Cory, was sentenced to 40 months in prison and ordered to pay $4 million restitution to the IRS on similar federal and state charges.

US Fidelis, formerly known as National Auto Warranty Services, did business under the name "Dealer Services." It was considered one of the nation's leading auto service contract providers.

The indictment alleged the Atkinsons and their company sold vehicle repair coverage under both vehicle extended service contracts and contracts associated with various vehicle products. The brothers were accused of keeping customer refunds, charging excessive fees, and telling consumers they would receive a pro-rated refund if they cancelled a contract but intended to keep part of any refund.

The Atkinsons were also accused of telling customers that all vehicle repairs were covered and concealed from consumers the fact that coverage contained liability limits and other conditions and exclusions from coverage.

Both brothers have prior offenses on their records. Darain Atkinson was convicted in 1986 of theft, forgery and burglary in Kansas, and convicted in 1987 of manufacturing counterfeit Federal Reserve Notes in Kansas. Cory Atkinson, 42, was convicted of felony criminal trespass in Colorado in 1997.

Darain Atkinson had face up to life imprisonment due to his prior felon status.

Information from the Associated Press was used in this report.


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