Law Professor Bilked Investors $2.4M in Diamond Scheme

A brazen scheme to embezzle millions of dollars from investors in a lab-grown diamond company has landed a respected University of Minnesota law professor behind bars. Edward S. Adams, a Minneapolis lawyer and law professor, was charged with orchestrating a complex fraud scheme to embezzle millions of dollars of investors’ funds.

According to the indictment, Adams, who held various managerial titles with Apollo Diamond, Inc., a privately held company that produced lab-grown diamonds, used his positions to embezzle funds from investors. The indictment states that Adams opened multiple bank accounts in his own name, without authorization from the company or its board of directors, and used these accounts to funnel money from investors to his own personal accounts.

The indictment alleges that Adams told investors that their money would be used for Apollo’s operations, including working capital, funding additional diamond growing equipment, and research and development. However, in reality, Adams was embezzling the money, depositing it into his personal accounts, and using it for his own personal expenses, including paying himself over $1.2 million and distributing the remainder to various individuals as determined by Adams.

The scheme, which spanned from 2006 to 2009, involved Adams raising over $25 million for Apollo, for which his financial services firm, Equity Securities, Inc., received approximately $4 million in commission. Adams then continued to handle the ongoing financial matters for Apollo with minimal oversight from the Board of Directors.

The FBI, U.S. Postal Inspection Service, and IRS Criminal Investigation Special Agents are all involved in the investigation and prosecution of Adams. The case highlights the importance of vigilance and oversight in preventing corporate fraud and the need for law enforcement agencies to work together to detect and prosecute white-collar crime.

Adams is expected to make his initial appearance in U.S. District Court in Minneapolis later this week. The indictment charges Adams with various counts of wire fraud, mail fraud, and money laundering. If convicted, Adams could face significant prison time and fines.

The case serves as a reminder of the importance of transparency and accountability in corporate finance and the need for law enforcement agencies to work together to prevent and prosecute corporate fraud.