Photo: DenisLarkin


A longtime corporate law professor at the University of Minnesota Law School was indicted Wednesday on charges that he embezzled more than $4 million from investors in the synthetic diamond company he helped run.

Edward Adams stole more than $4.38 million of investor funds and directed an additional $2.54 from the company to his own law firm between 2006 and 2013, according to the U.S. Attorney’s Office for the District of Minnesota. He is expected to appear in federal court this week.

“The defendant’s brazen theft of millions of investor’s funds over the course of several years is compounded by the fact that he holds positions of public trust as an attorney and law school faculty member,” said Richard Thornton, the FBI’s special agent in charge of the Minneapolis division.

Adams has been a member of the Minnesota Law faculty since 1992, and served for three years as its associate dean for academic affairs. He teaches corporate finance, bankruptcy, corporations and creditors’ remedies and secured transactions.

“We are aware of the announcement earlier today by the U.S. Attorney’s Office involving a university faculty member,” the university said in a written statement on Adams. “The announcement describes alleged activities fully outside of the faculty member’s role with the university, and we do not have anything further to share at this time.”

Prosecutors allege Adams devised a complex, years-long scheme to funnel funds from Apollo Diamond Inc.—a privately held company started by his father-in-law that produces diamonds in a lab—into accounts he personally controlled. Since 2004, Adams held a variety of titles within Apollo and its spinoffs, including chairman, chief financial officer, executive vice president and general counsel.

The company hired Adams’ financial services firm to raise $25 million from investors in 2003, and from then on Adams handled Apollo’s financial matters with “minimal oversight” from the company’s board, according to the indictment. He then opened a variety of bank accounts without the board’s approval and funneled investor money into those accounts—which only he controlled.

With Apollo on the brink of insolvency in 2010, Adams sought to hide his theft by persuading investors to convert their now-worthless Apollo stock into a new company that he secretly controlled called Scio Diamond Technology Corp., prosecutors allege.

Scio investors began suing Adams in 2012. Adams in turn sued the Minneapolis Star-Tribune newspaper after it ran a 2014 column critical of his role in what was then a $13 million net loss by Apollo and its various spinoffs.

“With more time on his hands, Adams could use the diamond debacle as a teachable moment,” that column reads. “He has all the material he needs for a new seminar on business law: ‘How to respond to angry investors who claim you’ve enriched yourself while the company you manage is going down the tubes.’”

Adams faces eight counts of mail fraud and six counts of wire fraud.