Corporate law prof is accused of stealing more than $4M from investors
A corporate and bankruptcy law professor at the University of Minnesota is accused in a federal indictment of stealing $4.38 million from investors.
Edward S. Adams is accused of stealing the money from investors in a company that made laboratory diamonds and in a successor company, report the Minneapolis Star Tribune and TwinCities.com. (Adams is not the Edward Adams who was once the editor and publisher of the ABA Journal.) The indictment (PDF) accuses Adams of mail and wire fraud.
The initial company, Apollo Diamond, was created by Adams’ father-in-law. Adams later held various corporate positions, including company president, and his law firm, Adams Monahan, made most of its money representing Apollo, according to the indictment. A press release is here.
Adams is accused of diverting investor funds to his law firm and to himself. When Apollo was near insolvency, partly because of Adams’ alleged embezzlement, he persuaded shareholders to convert their stock into shares of a new company that he secretly controlled, the indictment alleges. The new company, Scio Diamond Technology Corp., didn’t have the money to complete the purchase, so Adams orchestrated a reverse merger with a publicly traded shell company to raise funds.
Prosecutors allege that most of the $2 million Adams raised to make the purchase was funneled into bank accounts he controlled.
Adams joined the law faculty in 1992, according to an online bio. Before that he clerked for Judge J. Harvie Wilkinson of the Richmond, Virginia-based 4th U.S. Circuit Court of Appeals and worked at Latham & Watkins in Chicago.
Adams did not immediately respond to an ABA Journal email, sent to Adams’ law school email account.