Former Wadena insurance agency owner and agent John D. Paulson has been charged in U.S. District Court in the theft of over $500,000 in insurance premiums from clients, according to court documents.
The charges include two counts of mail fraud in connection with the thefts from 2011 until 2018.
The indictment against Paulson said he falsely represented to his clients that he would make their premiums payments to the insurance companies while he served as owner of David Paulson Agency.
“Instead he converted much of the money he collected from his clients to his own use," according to the complaint. "This left his clients either owing large amounts to their insurance companies or without the insurance policies they were paying Paulson to obtain." It also claims he provided fake invoices to clients that fraudulently inflated the amount of money they owed to the insurance companies.
The indictment states that in total Paulson stole about $524,000 and used the money to pay his mortgage and personal credit card bills. This case is the result of an investigation conducted by the Minnesota Commerce Fraud Bureau and the United States Postal Inspection Service. United States Attorney Erica H. MacDonald thanked the Wadena County Sheriff’s Office for their assistance with the investigation in a news release Wednesday, Nov. 18.
The Paulson name has a long history of insurance in Wadena with John and his brother Kevin taking over ownership of the David Paulson Agency Inc. in 1997 from their father, David. David started his insurance business in Wadena in 1961, buying the Roes Agency. The David Paulson Agency was acquired by North Risk Partners in 2017. Kevin continues to work there and deferred comments on the situation to Kate Burnevik, director of communications at North Risk Partners.
"North Risk Partners is committed to excellent customer service and the highest ethics. We are proud of the work we do to help businesses and individuals in the Wadena community meet their insurance needs," Burnevik said in an emailed statement.
After North Risk purchased David Paulson Agency, "North Risk discovered that John Paulson had engaged in inappropriate conduct prior to the acquisition," according to Burnevik. "We reported the matter to our regulatory agency and have worked cooperatively with our regulator and prosecutors as they have investigated Paulson’s conduct, a process that culminated in today’s federal criminal charges against Paulson."
John Paulson became an employee of North Risk for a period of time after the acquisition but has not been employed by North Risk since 2018.
"We are limited under the personnel laws from further comment at this time," according to Burnevik. The statement concludes that North Risk is a committed member of the Wadena community.
John Paulson most recently moved to Colorado, according to his workplace profile, where he was listed as a commercial sales executive for ALINK Insurance Services with 34 years of insurance experience. When contacted at his work place on Wednesday, Paulson said he was unaware of the charges against him and had no comment.