SourcingApr 18, 2024
Diamond Trade Remains Cautious Amid Economic UncertaintyDe Beers’ rough diamond sales were down 18 percent year-over-year in its latest round of sales.
CrimeMar 27, 2017
Former Lab-Grown Diamond Co. Exec Accused of Embezzlement
Edward S. Adams, 64, allegedly stole millions from investors in Apollo Diamond Corp. and its successor, Scio.
Minneapolis--A former executive of two synthetic diamond companies is facing federal fraud charges for allegedly embezzling millions from investors who thought their money was being used to buy diamond growing equipment.
The U.S. Attorney’s Office in Minnesota announced last week that 64-year-old Edward S. Adams of Minneapolis is charged with eight counts of mail fraud and six counts of wire fraud in a scheme that dates back to 2006 and involves both Apollo Diamond Corp.--which was founded by his father-in-law, Robert Linares--and its successor, Scio Diamond Technology Corp.
Also revealed by the U.S. Attorney’s Office in a news release about the indictment: Adams is a professor of law.
Richard T. Thornton, FBI special agent in charge of the bureau’s Minneapolis Division, expressed shock and disappointment about the charges. “The defendant’s 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.”
Adams became involved with Apollo Diamond Corp., a lab-grown diamond company based in Boston, in 2003 through his father-in-law, Linares.
According to the U.S. Attorney’s Office, Adams held various positions at Apollo, including chief financial officer, secretary, executive vice president and general counsel. The company tapped his financial services firm, Equity Securities Inc., to provide investment banking services and raise money for the company.
Equity Securities raised more than $25 million for Apollo and received about $4 million in commission.
After that, Adams continued to handle financial matters for the diamond grower, with “minimal oversight” from the board of directors, the U.S. Attorney’s Office said.
According to the indictment, Adams opened multiple bank accounts between 2006 and 2009 that were not authorized by Apollo and to which only he had access. He also directed the account statements to his personal address.
He told investors that they could purchase shares in Apollo by making their checks payable to the accounts he controlled, promising that their money would be used to buy more diamond growing equipment and to fund research and development. Instead, the U.S. Attorney’s Office alleges, he embezzled funds, diverting money for his own personal use and depositing some in his law firm’s bank account.
By 2010, Apollo was teetering on the brink of collapse due in part to Adams’ fraud.
To prevent his theft from being discovered in bankruptcy litigation, he allegedly devised a
scheme to appease shareholders by convincing them to shift their investment to a new lab-grown diamond company, Greenville, South Carolina-based Scio Diamond Technology Corp.
Scio was created by Adams and his former law partner, whom the indictment references as “M.M”--Michael Monahan.
According to the U.S. Attorney’s Office, Adams’ theft continued after he started Scio.
All told, he is alleged to have stolen more than $4 million over the years.
Adams, along with his father-in-law and Scio board member Theodorus Strous, were forced out of Scio in June 2014 via a campaign organized by disgruntled investors called “Save Scio.”
In a statement released following the indictment, Scio said its current board of directors and management team have been cooperating with the Department of Justice in its investigation as well as a separate one with the Securities and Exchange Commission.
The company said that Adams has had no involvement with Scio or the new board of directors since he was ousted in June 2014. Company records also indicate that Adams and Monahan have liquidated a majority of their personal interests in Scio.
“Given the downward pressure the sale of Adams’ and Monahan’s stock holdings have had on the market for the company’s stock, the company will be seeking all available remedies to preclude future sales of (their) shares,” Scio noted, adding that it is “hopeful” these proceedings will result in restitutions to the company.
Scio was created by Adams and his former law partner, whom the indictment references as “M.M”--Michael Monahan.
According to the U.S. Attorney’s Office, Adams’ theft continued after he started Scio.
All told, he is alleged to have stolen more than $4 million over the years.
Adams, along with his father-in-law and Scio board member Theodorus Strous, were forced out of Scio in June 2014 via a campaign organized by disgruntled investors called “Save Scio.”
In a statement released following the indictment, Scio said its current board of directors and management team have been cooperating with the Department of Justice in its investigation as well as a separate one with the Securities and Exchange Commission.
The company said that Adams has had no involvement with Scio or the new board of directors since he was ousted in June 2014. Company records also indicate that Adams and Monahan have liquidated a majority of their personal interests in Scio.
“Given the downward pressure the sale of Adams’ and Monahan’s stock holdings have had on the market for the company’s stock, the company will be seeking all available remedies to preclude future sales of (their) shares,” Scio noted, adding that it is “hopeful” these proceedings will result in restitutions to the company.
More on Crime
The Latest
Supplier BulletinApr 18, 2024
Discover History’s Hidden Gems at the Las Vegas Antique Jewelry & Watch ShowSponsored by the Las Vegas Antique Jewelry & Watch Show
WatchesApr 18, 2024
Watch E-tailer Collectability Hires Kelly YochThe Patek Philippe expert will serve as personal curator for the brand-focused company.
Brought to you by
The Blueprint for Success in Scalable, Personalized Jewelry RetailWith Ho Brothers, you can unlock your brand's true potential and offer customers the personalized jewelry experiences they desire.
WatchesApr 18, 2024
TAG Heuer Opens Its Largest Standalone Boutique at SeaThe 553-square-foot shop is aboard the Carnival Jubilee cruise ship.
Weekly QuizApr 11, 2024
This Week’s QuizTest your jewelry news knowledge with this seven-question quiz.
Policies & IssuesApr 17, 2024
NDC Prevails in U.K. Case Over Lab-Grown Diamond AdvertisingNDC filed a complaint against Skydiamond for use of phrases like “diamonds made entirely from the sky.”
Events & AwardsApr 17, 2024
And the 2024 Winner of the Shipley Award Is … John Carter received the AGS’s highest honor Tuesday afternoon at Conclave in Austin, Texas.
Brought to you by
How Jewelers of America Represents Your BusinessFor over 30 years, JA has advocated for the industry, fought against harmful legislation and backed measures that help jewelry businesses.
FinancialsApr 17, 2024
LVMH’s Q1 Jewelry Sales Fall 5%LVMH said the company performed well despite an uncertain geopolitical and economic environment.
MajorsApr 17, 2024
Stuller’s B&D Opens New HeadquartersB&D Sales and Service held a ribbon-cutting event for its new location in Cranston, Rhode Island.
CollectionsApr 16, 2024
Akaila Reid Launches ‘Eat Cake’ CollectionIt’s ultra-feminine and filled with gold, pearls, and soft pastels.
MajorsApr 16, 2024
Loudr Adds 2 DirectorsEmily Highet Morgan and Emily Bennett have joined the agency’s team.
MajorsApr 16, 2024
Stuller Releases First Lab-Grown Diamond Jewelry CatalogIts updated book for mountings is also now available.
SourcingApr 16, 2024
Karen Rentmeesters Takes Over as Interim CEO of AWDCShe has been with the organization since 2010, most recently serving as its chief officer of PR and industry relations.
TechnologyApr 15, 2024
Judge Rules Jeweler’s Lawsuit Against PNC Bank Can Move ForwardJoyce’s Jewelry sued the bank after cybercriminals drained its accounts of nearly $1.6 million through a series of wire transfers.
IndependentsApr 15, 2024
Alfred W. DeScenza of DeScenza Diamonds Dies at 95He is remembered by loved ones for his loyalty, integrity, and kindness.
AuctionsApr 15, 2024
Madeleine K. Albright Jewelry, Pins Coming to AuctionHosted by Freeman’s | Hindman, the sale will take place May 7-8.
AuctionsApr 15, 2024
All of Sotheby’s ‘Rough Diamonds’ Sold in Less Than an HourThe auction house said all 24 timepieces offered in its underground sale of rare and avant-garde watches quickly found buyers.
Events & AwardsApr 15, 2024
10 Can’t-Miss Sessions at AGS Conclave 2024From lab-grown diamonds and AI to the inevitable Taylor Swift mention, here are some of Conclave’s most intriguing educational offerings.
Recorded WebinarsApr 12, 2024
Watch: What Jewelers Need to Know About InsuranceFrom cybersecurity liability to trade show coverage, insurance experts share tips on how to build the right policy.
CollectionsApr 12, 2024
Piece of the Week: Lionheart’s Evil Eye Gemstone CharmThe charm is a modern rendition of the evil eye amulet that has been worn for thousands of years.
Events & AwardsApr 12, 2024
The Jewelry Symposium Announces 4 Scholarship WinnersAhead of its trade show next month, TJS awarded free registration and accommodations to one jewelry professional and three students.
Policies & IssuesApr 11, 2024
SRK Exports’ Journey Toward Net Zero Impact By the end of this year, SRK’s diamond manufacturing complexes will achieve net zero emissions, one of an impressive array of achievements.
Lab-GrownApr 11, 2024
AGTA Bans Lab-Grown Diamonds, Gemstones at GemFairMembers can still sell lab-grown stones, it said, but only natural gems are allowed on the show floor.
IndependentsApr 11, 2024
Steven Rosdal, Co-Founder of Hyde Park Jewelers, Dies at 77He is remembered for his charisma, passion, integrity, kindness, and wit.
MajorsApr 11, 2024
Macy’s Opens Books for Possible BuyoutThe retailer also appointed two new board members, avoiding a proxy fight from a potential buyer.
CollectionsApr 10, 2024
Sylvie Launches New Nature-Inspired Collection, ‘Tulira’The bridal collection consists of 35 engagement rings and seven wedding bands.
