By WMBD-TV

PEORIA – After months of denials, several civil lawsuits and a federal grand jury, the world found out Tuesday that Aaron Rossi, once a local wunderkind, lied and committed fraud regarding a Bloomington medical practice. 

Rossi, 39, pleaded guilty to mail fraud and filing a false tax return at Peoria’s federal courtroom, just days before he was to stand trial for misuse of funds from that practice several years ago.

During the hearing, held in one of the first-floor courtrooms, Rossi stood before Chief U.S. District Judge Sara Darrow in the orange jumpsuit of a Peoria County Jail inmate. He said little during the hearing except to answer yes or no to the judge’s questions.

Nearly two dozen people, either victims or family members, gathered to watch Rossi, who was shackled at his legs.

The plea agreement

Federal plea hearings are usually longer than ones that occur in state court and usually have a document that is several pages long that a judge will read from. Here, Darrow went through all the matters with Rossi in about 25 minutes.

As part of the deal, Rossi pleaded to two counts and federal prosecutors have agreed to drop several others when he’s sentenced on June 5. Rossi agreed to give up most of his appeal rights — a fairly common practice in federal court — in return for the government agreeing to some concessions on his guideline range.

Federal sentencing guidelines are based on the nature of the offense and a person’s background. It’s a linear graph. On one side is a person’s background and their past criminal history. On the other side is the offense level. Where the two meet is what a person’s range is.

They aren’t mandatory but rather a starting point for a judge to begin considering what sentence was appropriate.

The charges carry a maximum of 23 years in prison but it’s highly unlikely that Rossi would see a sentence anywhere near that. According to his plea agreement and to his defense attorney Richard Blake, Rossi’s advisory guidelines were 20 to 40 months behind bars.

Rossi could also be asked to pay restitution which has yet to be determined and also up to $500,000 in fines.

He’s been in custody since late August after Darrow found he broke several rules while on pretrial release.

What happened

Rossi was facing a slew of charges related to the misuse of funds in 2017 while he was working at Central Illinois Orthopedic Surgery. Federal prosecutors said he used his position as an office manager for his own gain.  

The charges stated he moved the practice’s bank account to a different institution and changed accountants. He also made misleading and false entries in the firm’s financial records to hide this. The indictments list the practice as a victim as well as two doctors who owned the practice, listed in the indictment as “Victims A and B.”  

The fraud involved having items such as a 49-inch high-definition TV shipped to his house on the company’s dime as well as hiding his trips to upscale men’s clothing stores as “uniform purchases.”

A federal prosecutor said Rossi chartered a private plane for his bachelor’s party using corporate money and also got other items from Amazon as well.

The filing a false tax return count occurred on Rossi’s 2017 tax return, where he told the judge that he failed to give his accountant all his information so he could avoid paying taxes. A prosecutor said that amounted to about $500,000 of unreported income.

Rossi had trouble explaining to Darrow what he did. It’s a common part of the plea as in federal court, one pleads guilty because they admit guilt whereas in state court, often times the plea is worded that a person believes that’s what could be presented at court.

The former CEO of Reditus hemmed and hawed as Darrow tried to get an explanation of what conduct constituted the fraud charges. Rossi would only that he ordered some items off Amazon that were unauthorized.

It took the federal prosecutor giving a factual basis to get more of the details.

The fraud happened years before he helped create Reditus, a company that became a biotech darling and one of the largest companies to do COVID-19 testing. It seized upon the COVID-19 pandemic to become one of the state’s largest testing companies, earning more than $200 million before it was shuttered in 2022 due to lawsuits from former business partners.

Two recently unsealed federal lawsuits allege massive fraud and grift committed by Rossi and his company, Reditus Laboratories, which resulted in taxpayers being bilked out of hundreds of millions of dollars.

One key facet of the plea agreement that was mentioned almost as an afterthought at the end was that it doesn’t preclude federal prosecutors from looking at other areas where Rossi might have done wrong as long as it doesn’t include the same issues at the Bloomington practice.

That could mean federal lawsuits that involve the government will proceed and it could mean the ongoing investigation into what happened could lead to more charges.

WMBD-TV can be reached at [email protected].