MINNEAPOLIS (WCCO) – A University of Minnesota Law School professor was indicted for swindling over $4 million from investors of a private company he owned.
Sixty-four-year-old Edward S. Adams, of Minneapolis, has been charged with eight counts of mail fraud and six counts of wire fraud.
According to the criminal complaint, Adams was involved with a company called Apollo Diamonds Inc. The company produced lab-grown diamonds, and Adams became involved through familial ties.
Over the course of a few years, he held several managerial titles at Apollo.
The complaint states that in 2003, Apollo retained Adams’ financial services firm to help them with investment banking services and fundraising.
Initially, Adams’s company raised over $25 million for Apollo, which earned his company $4 million in commission. So, Apollo kept them on to handle financial matters.
According to the complaint, from 2006 to 2009 Adams began to open bank accounts, labeled as investment accounts, for which he was the sole signatory and had sole access.
Over the years, Adams told investors, he would tell investors they could purchase shares of Apollo and to make their checks payable to accounts he controlled. He then embezzled the money.
During this time, the complaint states Adams deposited over $2,400,000, $1,200,000 of which went into his personal account and $101,500 into his law firm’s bank account. The rest was distributed into various funds.
Then, in 2010, Apollo could no longer financially stay afloat, due in part to the embezzlement by Adams.
The complaint states that Adams created a plan where a company he secretly controlled, Private Scio Diamonds Technology Corporation, would buy out Apollo.
Adams notified Apollo that this company was willing to buy them out, and he advised shareholders they would not have to spend any additional money and would retain the same amount of shares.
However, as Scio was a private company Adams created a reverse merger to make it look as thought Scio became a publicly traded company.
This lead investors to believe their assets were in a publicly traded company, when they were actually being funneled into Adams private accounts.
In total, from 2006 to 2013 Adams stole over $4.38 million, $2.54 million of which he gave to his own law firm.
Adams is expected to make his first court appearance later this week.