University of Minnesota law professor Edward S. Adams is facing an astonishing criminal indictment over millions of missing funds from investors in his companies.  The indictment says that Adams perpetrated an elaborate fraud on investors and fellow partners.  According to the indictment, from 2006 to 2013, Edward S. Adams stole more than $4.38 million from investors and paid more than $2.54 million to his own law firm.

What is astonishing is that Adams is the second faculty member to face criminal charges on the Minnesota law faculty.

At the heart of the indictment is Adams’ involvement in Apollo Diamond, Inc..  Apollo’s founder was Adams’ father-in-law.

He allegedly embezzled funds and then, with the company facing insolvency, Adams allegedly  had shareholders  convert their Apollo stock into stock in a new company — Scio Diamond Technology Corp.  He then allegedly siphoned off $2 million for his own accounts.

He is now facing eight counts of mail fraud and six counts of wire fraud.

In another interesting twist, Adams has sued the Star Tribune for defamation.  With the indictment, it is not clear if Adams will now withdraw the lawsuit.

According to his bio, Adams had a stellar academic record and served as Associate Dean for Academic Affairs at Minnesota:

Professor Edward S. Adams specializes in commercial, bankruptcy, and corporate law. He teaches bankruptcy, creditors remedies/secured transactions, commercial paper, corporations, and corporate finance. Professor Adams served as Associate Dean for Academic Affairs from 1997 to 2000. He was honored with the Stanley V. Kinyon Teaching and Counseling Award in 1994 and 1996, and was a co-holder of the Julius E. Davis Chair in Law for 1999-2000.

Professor Adams earned his B.A. degree, magna cum laude, from Knox College, where he was a member of Phi Beta Kappa. In the fall of 1984, he studied at the University of Freiburg in West Germany as a European Studies and NATO Conference Scholar. Professor Adams received his J.D. degree, cum laude, from the University of Chicago Law School in 1988. He was Managing Editor of the University of Chicago Law Review. Following graduation, Professor Adams clerked for Judge J. Harvie Wilkinson III of the United States Court of Appeals for the Fourth Circuit. He then practiced law with Latham & Watkins in Chicago. Before joining the University of Minnesota Law School faculty in 1992, Professor Adams was a Visiting Professor at Albany Law School of Union University. At Albany, he was the faculty founder of the Albany People’s Law Program, which provides free legal advice to members of the community. In 1997, Professor Adams graduated with an M.B.A. with highest honors from the Carlson School of Management at the University of Minnesota.

These controversies are not helping a law school that has been reeling from dropping applications and budget shortfalls.  Minnesota has long been one of the finest law schools even though it has dropped to 23 in the recent U.S. News and World Report rankings.  It still has a widely respected faculty and highly competitive student body.