March 23, 2017 05:06 PM
It is unclear whether a University of Minnesota law professor accused of stealing millions of dollars in an elaborate fraud scheme will be allowed to continue to teach students while under federal indictment.
Professor Edward Adams’ teaching status remained unchanged as of Thursday afternoon, according to Evan Lapiska, a university spokesperson. He said university officials have yet to speak to Adams a day after he was charged by a federal grand jury in Minneapolis with eight counts of mail fraud and six counts of wire fraud.
Adams is accused of embezzling more than $4.3 million from investors in various synthetic diamond companies from 2006 to 2013, according to the indictment unsealed Wednesday. During that time, Adams served as a director on one of the company’s boards.
Lapiska could not provide details about what the school policy is on faculty members who face criminal charges.
Adams was not in his law school office Thursday, and no one answered the door at his home a block from Lake Harriet in south Minneapolis.
Adams told 5 EYEWITNESS NEWS earlier this month he was unaware of any criminal investigation involving him.
In the 20-page indictment, prosecutors detailed a complex “scheme” in which Adams allegedly diverted shareholders’ investments into his St. Paul law firm and his personal accounts at Golden Valley bank.
In 2011, with his company on the brink of bankruptcy due to the alleged embezzlement, prosecutors say Adams created a new company called Scio Diamond Technologies Corp, which allowed him to appease shareholders and continue the fraud.
Adams reportedly told one employee at the time, “I pulled a rabbit out of the hat,” according to an email cited in court documents.
Prosecutors say Adams was able to “prevent investors from discovering that he had stolen millions… all while lining his pockets with additional money from new investors.”
Adams avoided “potential massive litigation from disgruntled shareholders” by requiring them to forfeit their right to sue as part of an investment agreement, according to authorities.
In 2013, a group of Scio investors filed a federal lawsuit in South Carolina against the company's board of directors, including Adams, accusing them of engaging in self-dealing and self-interested transactions. A judge ordered the investors to pursue their complaint through arbitration and dismissed the lawsuit.
Adams agreed to step down from the company’s board in 2014 after the U.S. Securities and Exchange Commission subpoenaed documents related to the company's corporate transactions, according to public filings.
Updated: March 23, 2017 05:06 PM
Created: March 23, 2017 04:51 PM
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