A University of Minnesota law professor has been indicted on charges that he orchestrated a fraud scheme to embezzle millions of dollars from investors in companies that he ran.

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.

Adams, an attorney who joined the law school faculty in 1992, is expected to make his first appearance this week in U.S. District Court in Minneapolis.

Federal investigators allege Adams, who held several positions in Apollo Diamond, Inc., deposited money from investors into several accounts that he controlled.

He told investors that their money would be used for the company's operations.

Instead, he embezzled the money, federal officials allege.

By 2010, the company was on the brink of insolvency because of the embezzlement, according to federal officials.

To keep the theft from being uncovered through bankruptcy litigation, Adams convinced shareholders to convert their worthless Apollo stock into stock in a new company — Scio Diamond Technology Corp. — that Adams secretly controlled, according to the indictment.

Federal officials allege Adams used the new company to raise $2 million and then funneled most of it into bank accounts that he controlled.

"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," said Richard Thornton, FBI special agent in charge of the Minneapolis division.

Adams has sued the Star Tribune for defamation for a story it published about him.

Mary Lynn Smith • 612-673-4788