Summary: A University of Minnesota Law professor was charged for swindling investors out of millions.
A University of Minnesota Law Professor was caught stealing millions from investors of a private company he owned. According to CBS Minnesota, Edward S. Adams, 64, was charged with eight counts of mail fraud and six counts of wire fraud for embezzling over $4 million.
Adams, who resides in Minneapolis, became involved in Apollo Diamonds Inc., a company that produces lab-grown diamonds after his family connections brought him in. Throughout several years, he held numerous managerial titles at the company, and in 2003, Apollo hired Adams’ financial services firm to help them with fundraising and investment banking.
Adams’ financial services firm raised over $25 million for Apollo, and his company was paid $4 million in commission. Apollo was so pleased with the company’s performance that they kept them on to handle Apollo’s finances, but that’s when things went south.
From 2006 to 2009, Adams began opening investment accounts that only he could access. Throughout that time, he told Apollo’s investors that they could purchase Apollo shares, and he instructed them to make the checks out to his investment accounts.
According to the lawsuit, that’s when Adams allegedly embezzled the investors’ money. He deposited $1.2 million into his personal bank account, $101,500 went into his law firm’s bank account, and the remaining funds were distributed amongst various funds. In total, he stole almost $2.4 million during this time.
In 2010, Apollo not surprisingly began to feel a hit on its finances, and they worried they could not stay financially solvent. Adams, who was one of the main reasons Apollo was going broke in the first place, allegedly devised a plan to have a company that he secretly controlled buy out Apollo.
The lawsuit stated that Adams told Apollo that Private Scio Diamonds Technology Corporation wanted to purchase them, and he allegedly advised shareholders that they would retain the same amount of shares and not have to spend any more money. The investors believed that their assets were going to be a part of a publicly traded company, but in fact, their money was being funneled again into Adams’ private accounts.
According to CBS Minnesota, Adams was able to dupe Apollo and its investors by creating a reverse merger to make it look like private company Scio was a publicly traded one.
With the initial embezzled money and the Scio deal, Adams allegedly stole over $4.38 million from 2006 to 2013. He gave over half of the money to his own law firm.
Adams, who is expected to appear in court this month, joined the University of Minnesota Law School in 1992, and he holds an endowed chair as the Howard E. Buhse Professor of Finance and Law. He has won teaching awards and has written numerous books, according to his still active university profile.
Adams earned a bachelor’s’ degree from Knox College before obtaining his J.D. from the University of Chicago. He also has a M.B.A. from the University of Minnesota.
Source: CBS Minnesota
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