A complaint filed by the Dakota County (Minnesota) Attorney's office claims that Scott Schoaf, who formerly ran collection agency Alternative Receivables Solutions, used his clients' money to pay his own bills. Schoaf has been charged with two felony counts of theft and two felony counts of theft by swindle.

Schoaf allegedly took more than $72,000  that was meant for his clients and used it for a variety of personal and business expenses - including for a lawn service, rent money and car payments, according to Dakota County Attorney James Backstrom.

The Minnesota Department of Commerce revoked Schoaf's debt collector's license in April 2010. At that time, Schoaf acknowledged misusing client money, stating that he was the victim of a bad economy. His office was overstaffed, and he had guaranteed jobs to eight people, he said, adding that he had taken "significant losses" in the two previous years.

The agency was supposed to collect money from individuals, then put that money in a trust. At the end of the month, Schoaf was supposed to pay his clients and take a commission for himself. But according to the county attorney’s complaint, Schoaf told the Department of Commerce he was roughly $29,563 out of trust – meaning he didn’t have enough money to pay his creditors – in 2010.

The commerce department alleged in 2010 that Schoaf had taken money from the trust 44 times in 2009. A court-appointed receiver discovered at least 128 creditors who were owed money.

Both of the theft charges and one of the theft-by-swindle charges have maximum sentences of 10 years and maximum fines of $20,000. The other theft-by-swindle charge has a maximum sentence of 20 years and a maximum fine of $100,000.

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