Former Collection Agency Owner Sentenced for Felony Theft Charges

The former owner of a Minnesota collection agency pleaded guilty Monday in Minnesota district court to one felony count each of theft and theft by swindle, according to the Dakota County (Minn.) Attorney's Office.

Scott Alan Schoaf, 50, who owned Alternative Receivables Solutions Inc., was charged in 2012 with taking more than $72,000 that was meant for his clients and using it for personal and business expenses - including a lawn service, rent money and car payments. The thefts occurred between June 2009 and March 2010.

Judge Shawn Moynihan sentenced Schoaf to 30 days of "Sentence to Serve" (a jail alternative program), probation for up to 20 years and restitution that is yet to be determined. Schoaf also was ordered to serve an additional 25 days of "Sentence to Serve" each year until restitution is paid in full. Schoaf also cannot volunteer or be employed where he can handle funds.

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 under state law 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, typically 30 percent of the amount collected. 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.

The charges carried maximum sentences of 10 and 20 years and maximum fines of $20,000 to $100,000.

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