Co-Owner Of U.S. Fidelis Pleads Guilty To Fraud

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ST. CHARLES, MO (KTVI)-- A man who once lived in a multi-million dollar mansion in Lake St. Louis now faces up to eight years in a Missouri state prison.

Darain Atkinson, one of the co-owners of U.S. Fidelis pleaded guilty in St. Charles County Circuit Court Thursday to three felonies.  It was part of a plea agreement reached with the Missouri Attorney General's office.

The state charged Darain Atkinson with 14 felony counts  last summer after an investigation into the sale of car repair warranty insurance policies.  Eleven of those counts were dropped under the plea agreement.

Atkinson's brother Cory currently faces a thirteen count indictment and is scheduled to be tried in St. Charles County beginning September 4th.

Missouri Attorney General Chris Koster was in the court room for the guilty plea.  Afterwards he spoke to reporters explaining how Atkinson stole from consumers who were entitled to policy refunds and committed fraud by misleading them over what kind of repairs were covered by the extended automobile service contracts.

Under the plea agreement the state will be able to ask the judge to sentence Atkinson to up to eight years in prison.  The defendant's attorney Scott Rosenblum said his client is trying to settle charges at the federal level over the next several months.  U.S. Fidelis customers in dozens of states beyond Missouri were also impacted by the fraud.

Koster said this case was the first one to be prosecuted under a new law governing insurance fraud in Missouri.  "Today's criminal prosecution we still think was important to complete this message that we take honesty in this area very seriously," Koster said.

Rosenblum said his client has cooperated even to the point of turning over all his assets to the bankruptcy court.  "When he started this business, this company I don't think he had any intention of it ending up in the way that it did."

Last year the federal bankruptcy court ordered mansions owned by the brothers and other valuables sold to help settle millions of dollars worth of claims by former customers.  27 million dollars worth of proceeds and seized assets now are held by the court and will be distributed at a later date.

St. Charles County Circuit Judge Jon Cunningham agreed to allow Atkinson to remain free on bond until his sentencing on state charges  July 16.

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