ADAMS TWP — A township man is accused of taking out more than $260,000 in fraudulent private student loans.

The victims in the alleged scam, investigators said, were lenders and Paul M. Dazen's own stepdaughter.

Rather than using the money for Amanda N. Murphy's college education, according to court documents, Dazen in 2006 and 2007 used the funds to run his cleaning business and to pay for personal expenses.

“The money went for everyday things,” said Butler County Detective Scott Roskovski. “He spent it on groceries, gas and for shopping at malls and stores.”

The magnitude of the suspected fraud left Roskovski dumbfounded.

“How could this have happened?” he asked. “I still can't answer that.”

Dazen was to turn himself in this afternoon for arraignment before District Judge Wayne Seibel in Evans City on 66 felony theft-related counts in the case filed Friday.

Pittsburgh attorney David Shrager, who is representing Dazen, did not immediately return a telephone call.

Investigators believe Dazen took advantage of private lenders' eagerness to make large, higher-interest loans and of Murphy's trust to secure 11 allegedly fraudulent loans between March 17, 2006, and July 19, 2007.

During that time, Murphy, the defendant's stepdaughter, was attending Geneva College in Beaver Falls, Beaver County.

To help finance her education, authorities said, Murphy received student loans throughout her four-year enrollment.

She told investigators that the defendant and her mother, Pamela Dazen, agreed to pay off the school loans after she graduated.

“Paul Dazen took on the role of applying for all loans and completing all necessary loan requirements,” according to court documents.

Murphy ceded all financial responsibility to the defendant, Roskovski said.

“She would come home from school and her step dad would have papers for her to sign. She'd sign them,” the detective said.

“What kid wouldn't do that? Your mom and dad say sign that and you sign it. If you can't trust your parents, who can you trust?

But, documents allege, Dazen betrayed that trust.

He submitted student loan applications in Murphy's name and received checks ranging from $4,000 to $42,000.

In all, investigators said, Dazen obtained $262,504 in fraudulent loans.

Among the institutions to fall victim in the suspected scam are banks funding loans disbursed by companies such as Sallie Mae, the nation's the largest private student lender, and SunTech Servicing, a student loan servicer.

The banks include Richland State Bank, HSBC Bank, JP Morgan Chase, National City Bank and Bank of America, documents said,

Investigators said that Dazen deposited the illegally obtained checks into the business account for Innovative Cleaning Solutions, a business he co-owns with Pamela Dazen.

The defendant, in an effort to legitimize the transactions, added his stepdaughter to the business account and as a signatory.

“(Murphy) was unaware that she was on the account or what it meant to be on the account,” Roskovski said, “as she was only 18 years old at the time.”

The detective described Murphy as a “100 percent victim” in the purported scam.

“She's a nice girl — very quiet, very timid,” Roskovski said. “I saw her bank account. She's got nothing.”

He said that Dazen and his wife are the only two people who withdraw from the business account. Murphy never made any deposits or withdrawals, or wrote checks on the account.

Murphy was unaware that the defendant was “using the money for his own personal use,” documents said.

Roskovski declined to comment when asked if Pamela Dazen was ever a target in the investigation, He acknowledged, however, that charges against her have not been ruled out.

Murphy only learned of the suspected crime against her in late-2010 when she began receiving telephone calls from lenders. She then was informed of how much she owed — $444,662, documents said.

That amount, Roskovski said, includes the alleged fraudulent loans, $79,125 in legitimate loans Murphy applied to her education, and the accrued interest on all the loans.

Authorities said the reason, in part, that it took so long to file charges in the case was because it was not immediately known who had jurisdiction over the investigation.

Roskovski said he was assigned to the case after it was initially referred to the U.S. Department of Education and later the U.S. Attorney's Office.

Since 2012, he said, he has tried to speak to the defendant in hopes of resolving the case. But Dazen has deferred any questions to his attorney.

“I tried for a year and a half to mediate this, to get him to try and assume responsibility,” Roskovski said of Dazen. “But he would not.”

Murphy's life, meanwhile, has been left in tatters. She lives with her aunt in the Youngstown, Ohio, area.

“She got a degree in education. She wanted to be a teacher,” Roskovski said. “But she can't do that now because she's in debt by almost a half-million dollars. Her credit is ruined.”