State authorities are shutting down two Twin Cities collection agencies, accusing owner Robert Dunham of using clients' money to pay for extravagances such as a classic Corvette, a family vacation in Costa Rica and a zip line tour over 11 waterfalls.

Dunham, 50, of Lakeville, ran Receivables Management Solutions Inc. and Wentworth Assets LLC.

The Minnesota Department of Commerce put both St. Paul-area businesses into receivership and is seeking to revoke Dunham's debt collection registration and hit him with a civil penalty. The five-count civil charges against Dunham include commingling customer funds with money for operating expenses, operating without a license and demonstrating untrustworthiness or incompetence.

"We're taking this action to shut down abusive debt collectors to stop them from illegally lining their own pockets and harming consumers and businesses," Commerce Commissioner Mike Rothman said in a statement Tuesday.

The action by the Commerce Department is the latest as authorities crack down on debt collectors. Problems in the industry were the focus of a 2010 Star Tribune investigative series, "Hounded."

Dunham could not be reached for comment. He's scheduled for a prehearing conference before an administrative law judge in St. Paul on Oct. 31, according to the charging documents.

Dunham's businesses were collecting consumer debts for nearly 5,000 companies, state officials said. But Receivables Management Solutions' trust account at U.S. Bank, which was supposed to house the money collected for clients, had either zero or negative balances at least 40 times between June 2012 and January 2013 because Dunham was draining the account to pay for operating and personal expenses.

Investigators found that Dunham ordered employees to fabricate checks from consumer bank accounts to try to cover the company's payroll.

Dunham told authorities in May that he allowed the company's license to expire because it had a net worth of over a negative $1 million and he couldn't get the required $50,000 bond. Yet Dunham allegedly never stopped his debt collection activities.

Jennifer Bjorhus • 612-673-4683