He's accused of stealing $4M+.
A federal indictment charges Edward S. Adams, who was involved with lab-grown-diamond companies Apollo and Scio, with fraud.
The charges include eight counts of mail fraud and six counts of wire fraud, Acting U.S. Attorney Gregory G. Brooker announced.
Adams, who is a law professor at the University of Minnesota, is expected to make his initial appearance in U.S. District Court in Minneapolis later this week. He is accused of "orchestrating an elaborate fraud scheme to embezzle millions of dollars of investors’ funds," according to the announcement.
Adams, 64, served in several positions with Apollo Diamond Inc. and Apollo Diamond Gemstone Corp., including chief financial officer, secretary, executive vice president and general counsel. According to the indictment, Adams from 2006 through 2009 told investors they could buy shares by making checks payable to accounts he controlled. Prosecutors say that instead of using the money for company operations, he embezzled it.
The announcement states that in March 2011, Adams and a partner created a privately held company called Scio Diamond Technology Corp., which was to purchase the assets of Apollo. Through a "reverse merger" transaction, the publicly traded Scio was formed — and Adams is accused of using that series of events "as yet another opportunity for personal profit."
According to prosecutors: "In total, from 2006 through 2013, ADAMS stole from investors more than $4.38 million and paid to his own law firm more than $2.54 million."
“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,” said Richard T. Thornton, FBI special agent in charge for the Minneapolis Division. “The FBI remains committed to working with our law enforcement partners to detect corporate crime in all its forms and bring those responsible to justice.”
Scio issued a press release Thursday stating that Adams "has had no involvement with Scio Diamond or the new Board of Directors since the conclusion of the successful 'Save Scio' proxy battle on June 23, 2014." Scio Diamond's current board and management team have been cooperating with the Department of Justice in its investigation, according to the release.
The company said it has also been cooperating with a related Securities and Exchange Commission investigation.
"In light of these allegations, Scio Diamond is also hopeful these proceedings will result in restitutions to the Company for the benefit of all shareholders," the release stated.
Read more at DOJ