Law Professor Accused of $25M Diamond Fraud

MINNEAPOLIS, MN – Edward S. Adams, a Minneapolis attorney and university law professor, stands accused of masterminding a brazen fraud scheme that allegedly siphoned over $25 million from investors. Acting United States Attorney Gregory G. Brooker announced a federal indictment today, detailing years of embezzlement tied to Apollo Diamond, Inc. and Apollo Diamond Gemstone Corporation – companies producing lab-grown diamonds. Adams is expected to appear in U.S. District Court in Minneapolis later this week to face the charges.

The indictment paints a picture of systematic deception. From 2006 through 2009, Adams allegedly opened a network of unauthorized bank accounts – “RL Investments,” “DL Investments,” “ADR Investments,” alongside accounts nominally tied to Apollo Diamond – all under his sole control. These accounts, according to prosecutors, were used to funnel investor money intended for Apollo’s operations directly into his own pockets. Account statements were conveniently mailed to his personal addresses, shielding the scheme from scrutiny.

“The defendant’s brazen theft of millions of dollars 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,” stated FBI Special Agent in Charge Richard T. Thornton. The FBI, along with the U.S. Postal Inspection Service and IRS Criminal Investigation, built the case against Adams, highlighting a coordinated effort to combat corporate crime. Postal Inspector in Charge Craig Goldberg emphasized the gravity of the offense, stating, “Fraud of this magnitude is not a victimless crime. Honest, hardworking Americans pay the price when fraudsters wrongfully steal their hard-earned money.”

Apollo Diamond initially retained Adams’ financial services firm, Equity Securities, Inc., in 2003 to raise capital. Equity Securities successfully brought in over $25 million for Apollo, earning approximately $4 million in commissions. Adams, leveraging his position as CFO, Secretary, EVP, and General Counsel, then allegedly took the reins of the company’s finances with minimal oversight from the Board of Directors, creating the perfect conditions for the fraud to flourish. He told investors checks payable to his controlled accounts would fund Apollo’s growth – working capital, equipment, and research – a promise prosecutors say was a lie.

The indictment details specific instances of alleged misappropriation. Approximately $2,400,000 deposited into the “RL Investments” account was allegedly diverted: over $1,200,000 for Adams’ personal use, $101,500 to his law firm, and the remainder distributed at his discretion. By 2010, Apollo was reportedly unable to meet its financial obligations, a direct consequence, authorities claim, of Adams’ systematic embezzlement. Shea Jones, Special Agent in Charge of the IRS Criminal Investigation St. Paul Field Office, affirmed their commitment to financial investigative expertise to dismantle such schemes.

Adams now faces a federal indictment, and if convicted, could see his career and freedom vanish. This case serves as a stark reminder that even those in positions of trust are not immune to prosecution for financial crimes. Grimy Times will continue to follow this case as it unfolds in the Minneapolis court system, bringing you the unvarnished truth of this alleged multi-million dollar betrayal.