A University of Minnesota law professor who specializes in business investments allegedly embezzled millions from investors in companies he controlled.
Edward Adams — an expert in commercial, bankruptcy and corporate law at the University’s Law School — allegedly stole more than $4.38 million from investors and paid over $2.54 million from companies he ran to his own law firm, according to an indictment filed in U.S. District Court Thursday.
Investigators say the fraud occurred over seven years starting in 2006.
Adams is expected to make his first federal court appearance this week in Minneapolis, the Star Tribune reported Thursday.
The companies, Apollo Gemstone and Apollo Diamond, Inc., are collectively known as Apollo.
Federal investigators allege Adams deposited money from investors into several accounts that he controlled, assuring investors their money would be used for the companies’ operations.
Instead, he allegedly embezzled the money.
Federal officials said by 2010, the company was nearly insolvent due to embezzlement.
Adams told shareholders to convert their worthless stock into stock in a new company that Adams controlled to keep the theft from being uncovered through bankruptcy litigation, federal prosecutors allege.
Adams then put the $2 million he raised into bank accounts he controlled, federal officials claim.
For years, shareholders in Adams’ companies raised concerns about their investments. He has faced several lawsuits and a Securities and Exchange Commission investigation, the Star Tribune reported in 2014.
Adams has taught at the University since 1992.
Adams also was associate dean for academic affairs from 1997 to 2000. He has published seven books and dozens of journal articles, according to the Law School’s website.
Adams is teaching two courses this spring on corporations and business law.
Among the topics covered in the classes are understanding “the potential financial rewards of an investment opportunity” and the “distribution of powers among the corporate board of directors, its officers and its stockholders,” according to his Law School webpage.
In an emailed statement, a University spokesman acknowledged the charges but otherwise declined to comment.
“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,” the statement read.
