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Plea agreement reached in insurance fraud case against Willmar, Minn., jeweler

WILLMAR — A plea agreement was reached Tuesday in an insurance fraud case against a Willmar jeweler, allowing for a stay of adjudication which clears the way for future dismissal of the charge.

Todd Paffrath, 60, will still have to serve up to three years on probation and pay a $1,000 fine. But he will not serve any jail time, and the felony insurance fraud charge against him will be formally dismissed at the end of three years and erased from his record, as long as he complies with the terms of the sentence and does not commit any new offenses.

It was “the best possible” outcome his client could have received, said Daniel Mohs, Paffrath’s attorney, after the hearing and sentencing Tuesday at the Kandiyohi County Courthouse.

“I think everyone is best served by this resolution,” Mohs said.

Under the agreement, Paffrath entered an Alford plea, meaning he did not admit to a crime but acknowledged there was enough evidence that could lead a jury to find him guilty.

Paffrath, the third-generation owner of Paffrath and Son Jewelers, filed a $15,528.10 insurance claim late in 2011 for a diamond ring stolen from his store. The two-carat ring was later recovered in a pawn shop in Fridley. Thomas Scott Wright, 54, of Atwater, was arrested and pleaded guilty last month in connection with the theft.

According to the criminal complaint filed against Paffrath, an appraisal subsequently determined the ring was worth about $10,000 less than the insurance claim that was submitted. Paffrath allegedly told the insurance company that the invoice was not for the ring itself but for a ring of similar value.

In a written statement Tuesday to the Tribune, Paffrath said he did not have the original invoice for the ring, an heirloom handed down from his grandfather, so provided one to the insurance company using estimates from suppliers that valued the ring at $15,000 to $20,000.

“It was never my intent to gain a profit from the insurance company; I simply wanted to replace my family heirloom,” he said.

He repaid the insurance settlement shortly after the stolen ring was found. After recovering the ring, he also obtained his own appraisal from a jeweler specializing in estate jewelry, which put the ring’s replacement value at $14,500.

Had he been convicted, Paffrath could have faced a sentence of up to 10 years in prison, a $25,000 fine or both.

Judge Michael Thompson turned down a request by Paffrath’s attorney to allow him to serve the entire three years of his probation without supervision. Instead, Thompson ordered supervised probation until Paffrath pays a $1,000 fine as part of his sentence. Paffrath also may perform community service to help pay the fine.

Thompson called the stay of adjudication “appropriate.”

“I think this is a just resolution,” he said.

Paffrath spoke only briefly at the hearing, apologizing to his family and to the court.

“It’s been a long year. … I’m sorry that I’m here,” he said.

Thompson told him to accept his mistake and “then move on with your life and not dwell on it. … I don’t anticipate that it will ever be repeated.”

Anne Polta

Anne Polta covers health care, business/economic development and general assignment. Her HealthBeat blog can be found at Follow her on Twitter at @AnnePolta.

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