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3/27/2017 CandidatefordeanofUBLawSchoolchargedinembezzlementschemeTheBuffaloNews

Candidate for dean of UB Law School


charged in embezzlement scheme

By Jay Tokasz (http://buffalonews.com/author/jay_tokasz/)


Published Sat, Mar 25, 2017

A nalist to become the next dean of the University at Buffalo Law School was indicted this week
on federal fraud charges related to the alleged embezzlement of millions of dollars from investors
in a company he helped run.

The U.S. Attorney's Ofce District of Minnesota charged Edward S. Adams, 64, a law professor at
the University of Minnesota, with eight counts of mail fraud and six counts of wire fraud.

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Adams -- an expert in corporate law and a former associate dean at the University of Minnesota
Law School -- was among ve nalists for the dean's post at the UB Law School who visited the
campus in February and met with law school faculty and top university ofcials.

A UB spokesman said in an email statement that Adams "was not under consideration when the
charges against him were led."

Adams did not return a call seeking comment.

The indictment alleges that over a period of seven


years, Adams stole $4.38 million from investors in a
company that produced lab-grown diamonds. Adams
paid to his own law rm more than $2.54 million
during that time, according to the indictment.

UB launched a search for a new dean last September,


with a 15-member committee led by Paul Tesluk,
dean of the UB School of Management. The former UB
Law School dean, Makau W. Mutua, resigned in 2014.
(http://s3.amazonaws.com/bncore/wp- James A. Gardner, a constitutional law expert, has
content/uploads/2017/03/adams0061.jpg)been serving as interim law school dean.
Edward S. Adams
The university hired a national rm, Russell Reynolds
Associates, to assist with the search. University
administrators are hoping new leadership will help overcome divisions within the Law School
and bolster its sagging U.S. News & World Report rankings.

Adams was the rst of ve nalists to visit campus in February. He followed up his visit with an
open letter to UB law faculty saying he looked "forward to receiving an offer to be Dean at UB. I
believe I will excel at it. It will be my sole focus."

He also invited them to call him with any questions.

Adams was dropped from consideration for the job prior to the indictment announcement,
Tesluk said.

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"Just being a nalist is not the last stage in the process. There's further ongoing due diligence
that is undertaken. He was not in further consideration at that point," Tesluk said.

Not forthright

Adams had been under investor scrutiny well before the indictment. In 2014, the Minneapolis
Star-Tribune reported that disgruntled shareholders in a company called Scio Diamond
Technology Corp. alleged in a federal lawsuit and in lings with the Securities and Exchange
Commission that Adams had extracted $3.85 million from the company for his brokerage and law
rm.

Tesluk said the search committee was aware of the Star-Tribune report. They investigated the
matter and found that a judge had dismissed the investor lawsuit with prejudice, meaning the
case was over and could not be brought back to court.

The committee was not privy to any pending criminal charges against Adams, Tesluk added.

"Clearly, there was more to this than was possible to be known at the time," he said.

Tesluk said the search rm and committee repeatedly asked candidates to reveal anything that
could be cause for concern before advancing their candidacies.

"It's fair to say he was not being forthright in the way we would need and expect," Tesluk said.
"Would we be in a different place if we had full knowledge? Of course we would."

But Tesluk said all of the nalists had outstanding qualications, and the process ultimately
worked as it should.

'Brazen theft'

The search committee concluded its work by bringing the ve nalists to campus for
presentations and question and answer sessions with faculty and staff, as well as smaller group
meetings. Their names, along with insights from the committee about each candidate, were then
forwarded to Provost Charles F. Zukoski without ranking, Tesluk said.

The other nalists who visited UB were: Aviva Abramovsky, associate dean for international
initiatives and special projects and professor of law at Syracuse University; Wayne A. Logan,
professor of law in the Florida State University College of Law; Katherine Hunt Federle, professor

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of law and director of the Center for Interdisciplinary Law & Policy Studies at the Ohio State
University Moritz College of Law; and Renee Newman Knake, professor of law & Doherty Chair in
Legal Ethics atUniversity of Houston Law College.

Logan withdrew his candidacy for personal reasons after his visit. The on-campus visits were
completed Feb. 27.

Adams has a law degree from the University of Chicago and a master's in business administration
from the University of Minnesota. He joined the University of Minnesota Law School faculty in
1992. A spokesman for the University of Minnesota said in a statement by email that the
university was aware of the U.S. Attorney's Ofce charges but would not comment further.

"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," said Evan Lapiska,
university spokesman.

Adams took a leave of absences from his teaching responsibilities following the indictment.

Aside from his academic work, Adams operated a nancial services rm, Equity Securities, and
also held various management roles with Apollo Diamond Gemstone Corp., a company that
produced "lab grown" diamonds through a patented process called chemical vapor deposition.

In 2003, Apollo hired Equity Services to raise $25 million in investment. Adams told investors to
purchase shares in Apollo by making checks payable to various bank accounts that he controlled,
then spent money for his personal use instead of Apollo operations, according to the indictment.

When Apollo was on the brink of insolvency, Adams convinced shareholders to convert their
worthless Apollo stock into stock in a new company, Scio Diamond Technology Corp. The
indictment further accused Adams of funneling nearly $2 million in additional investment into
bank accounts he controlled.

The defendants brazen theft of millions of dollars of investors 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.

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