St. Louis, MO - Cory Atkinson was sentenced to 40 months in prison on charges of conspiracy to commit mail and wire fraud and filing false tax returns. In addition to the prison sentence, he was ordered to pay over $4 million restitution to the IRS.

According to court documents, Cory Atkinson and his brothe,r Darain Atkinson, owned and operated US Fidelis, which was the nation's largest marketer of vehicle service contracts (VSCs). Prior to 2009, the business operated under the name National Auto Warranty Services, Inc. (NAWS). US Fidelis / NAWS was structured as a privately held company with each brother owning 50% of the business.

US Fidelis / NAWS made its money by marking up the price of the VSC, which was often more than $1,000. The total purchaser cost for a VSC was often greater than $2,000. US Fidelis / NAWS used a variety of techniques to market and sell VSCs, including direct mail to consumers, media advertisements and unsolicited telephone calls.

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. The tax loss to the United States was more than $4 million.

CORY ATKINSON, of Chesterfield, MO, pled guilty in June to one felony count of conspiracy to commit mail and wire fraud, and one felony count of filing false tax returns. He appeared today for sentencing before United States District Judge Catherine D. Perry.

Darain Atkinson, St. Louis, MO, pled guilty April 9, to one felony count of conspiracy to commit mail and wire fraud, and one felony count of filing false tax returns. Heis scheduled for sentencing September 25, 2012.

This case was investigated by Internal Revenue Service-Criminal Investigation, United States Postal Inspection Service, Federal Bureau of Investigation and the Missouri Attorney General's Office. Assistant United States Attorneys John Bodenhausen and Charles Birmingham are handling the case for the U.S. Attorney’s Office.