A onetime Minnesota insurance agent has been charged with concocting a long-running fraud scheme that netted him more than $500,000.
John D. Paulson, 56, of Wadena, was charged Tuesday in U.S. District Court in Minneapolis with two counts of mail fraud in connection with the thefts from 2011 until 2018.
Minnesota Commerce Department records show that Paulson's license to sell property, accident and health, casualty and life insurance has been inactive since March 2019.
However, state records in Colorado show he has an active insurance license associated with a firm in Denver.
According to prosecutors:
Paulson collected insurance premiums from his clients but failed to turn the money over to insurance companies for policies. This left his clients owing large amounts to their insurance companies or without policies.
He used the money, about $524,000, to make house payments and pay personal credit card bills.
Court records do not list an attorney for Paulson. Messages were left for him Wednesday seeking his response to the allegations.
Paulson and his brother Kevin ran their insurance business in Wadena until they sold it to North Risk Partners in July 2017. The Paulsons were kept on by North Risk, but John was fired in September 2018, Kevin said Wednesday.
Kevin Paulson still works for North Risk and said he cooperated with investigators and did not participate in his brother's alleged scheme.
He said his brother stole from about six clients, and it came to light when "we had one of our customers question our account. So, we started digging into it."
Kevin Paulson didn't specify where the money went other than to say his brother "always had a habit of living very well. I questioned how he could afford it."