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Rosemount man charged with stealing from his collection clients

Two years after the Minnesota Department of Commerce shut down his collection agency, Rosemount resident Scott Schoaf faces felony charges for reportedly using his clients' money to pay his own bills.

According to Dakota County Attorney James Backstrom, Schoaf took more than $72,000 that was meant for his clients and used it for a variety of personal and business expenses. A complaint filed this week in the Dakota County Attorney's office claims Schoaf used the money to help run his business, Alternative Receivables Solutions. He also reportedly used the money to pay for lawn service and to make payment on a vehicle.

The Department of Commerce revoked Schoaf's debt collector's license in April of 2010.

Speaking to the Town Pages in 2010, Schoaf acknowledged misusing client money. He said he was the victim of a bad economy. His office was overstaffed, and he had guaranteed jobs to eight people. He said he had taken "significant losses" in the two previous years.

"I'm not hiding anything. I'm not taking exorbitant trips," he told the Town Pages in 2010. "I wasn't buying any brand new cars. It was just a stupid decision on my part."

Schoaf said the bad economy made it harder for him to collect for his clients and made it harder for him to run his business.

The way Schoaf's business was supposed to work, he would collect money from people who owe, then put that money in a trust. At the end of the month, he would pay his clients and take a commission for himself. According to the county attorney's complaint, though, Schoaf told the Department of Commerce 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 Rosemount police investigation showed Schoaf had transferred trust money to an operating account used to pay rent, postage, payroll, taxes, multiple credit cards and loans.

Schoaf's wife, who served as his administrative assistant, was responsible for printing checks to creditors. She said she did not know those checks had not been sent out. Police found boxes of unmailed checks in Schoaf's desk drawer when they executed a search warrant.

According to the complaint, ARS collected at least $72,602 that it failed to pay to its clients between May of 2009 and March of 2010. A court-appointed receiver discovered at least 128 creditors who were owed money.

The Dakota County Attorney's office has charged Schoaf with two felony counts of theft and two felony counts of theft by swindle. 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.