Former Ramsey County employee charged with theft, embezzlement of more than $64K in public funds

A former Ramsey County employee who was fired amid an investigation into his use of a county credit card has now been charged.

Court records show 42-year-old Paul Richard Scharf is charged with eight counts of theft-by-swindle and eight counts of embezzlement of public funds.

The Dakota County Attorney’s Office said Scharf stole more than $64,500 using a Ramsey County credit card from July 2017 through August 2019, when he was employed by the county.

According to a criminal complaint, in May 2019, Menards Corporate contacted the Minnesota Bureau of Criminal Apprehension about merchandise credit checks (MCCs) being sold on eBay. The MCCs were associated with purchases made using a tax-exempt number associated with Ramsey County.

When items were returned to the store, the value was placed on an MCC, which can then be used to buy other things in the store at a later time, like how a gift card works.

Ramsey County employee fired amid criminal investigation for use of county credit card

Initially, Menards found 30 MCCs had been sold on eBay, all from returns on a Ramsey County card used by Scharf. He was also seen in several videos as the person making the original purchase and returning several items on different occasions.

When questioned by BCA agents, two others seen making some returns said that Scharf had requested they return the items and give him the MCCs they received.

After executing a search warrant on Scharf’s phone, agents found contacts for two people who were selling the MCCs, who told agents they’d been selling the MCCs after getting them from someone they knew as "Pauley." Agents found the contact matched a phone number that belonged to Scharf with more than 60 text messages offering to sell or trade MCCs at 50% of their face value.

Between October 2017 and July 2019, 123 sales for Menards MCCs were found on eBay, some of which included more than one MCC. All of the MCCs were issued on returns from purchases made on Scharf’s county credit card.

The complaint states agents noticed some instances where there were only a few minutes between the original purchase and the subsequent return of the item.

In total, 265 MCCs associated with alleged illegal transactions involving Scharf’s county credit card were found from October 2017 through December 2019, adding up to more than $53,500.

The complaint states agents also found text messages showing Scharf was also selling Target gift cards to one of the same people who’d been buying the MCCs from him and later selling them on eBay. Agents determined the Target gift cards were also generated on returns issued from purchases on Scharf’s county credit card.

Scharf claimed he didn’t know the people who’d been selling the MCCs on eBay and said any MCCs he got were used for later purchases on behalf of the county, despite the county not being able to locate numerous tools and equipment purchased using the county credit card.

The total loss from the illegal activities was $64,800, according to the complaint.

Scharf is set to appear in court in the next several weeks.