PEORIA, Ill. (WMBD) — Aaron Rossi, the former biotech wunderkind and the man who was seen as a hero during the early days of the COVID-19 pandemic, was sentenced Tuesday to just over three years for defrauding the state and others regarding testing.
The 37-month sentence must be served on top of an existing 5-year sentence handed down last year for another fraud perpetrated by Rossi against a Bloomington medical group.
The fall from grace is now complete as Rossi, 41, stood before Chief U.S. District Judge Sara Darrow, wearing an orange shirt and pants of a county jail inmate. He had a belt of chain around his waist where his handcuffs were attached.
Nearly two dozen people filled Darrow’s first floor courtroom at the U.S. District Court in Peoria for the hour-long hearing. And like Darrow did last summer when she handed down the five-year sentence, she had little pity for Rossi.
Now, as she did then, she described his actions as pure greed and unbridled hubris. While she deviated slightly from the guideline range, which called for a minimum of four years, she said she wouldn’t be shocked if he reoffended, noting his behavior in the earlier fraud case in Bloomington and then the one in Peoria.
It was like a character trait, she said.
In April, Rossi pleaded guilty to healthcare fraud in connection with defrauding the state of Illinois and public and private health insurance companies out of hundreds of thousands of dollars during the COVID-19 pandemic.
He also admitted through a plea agreement with prosecutors that he brought contraband into the Peoria County Jail last month.
Darrow did not impose a six-month sentence on that charge, saying he was punished enough and gave him credit for time served.
Between the two cases, he had faced close to 5 1/2 additional years based upon his guideline range.
Federal sentencing is based upon a grid, with the offense level on one side and the criminal history on the other. Match up the two, and that’s the guideline range. But that can change if there are other factors.
Under federal law, he must serve at least 85% of his sentence.
Darrow did not impose a fine and noted that the state of Illinois and others who were defrauded out of $525,000 had been repaid in the past few years, but that didn’t excuse his conduct.
Saying he didn’t get a Gold Star for paying people back, she likened it to taking a cookie from the cookie jar and then putting it back. A crime is still a crime, she said.
The judge did, however, agree with both sides to allow the government to confiscate Rossi’s $1 million motor coach.
What the fraud case was about
Pekin-based Redtius, a pathology lab, 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.
But that started to unravel when his former partners alleged they were cut out or pushed out of the company and, thus, the profits. Those civil lawsuits alleged Rossi used the company as his own personal piggy bank to finance his lifestyle, which included a private jet, fancy cars and other luxury items.
The company shuttered in late 2022, sending hundreds of people to the unemployment line.
Federal prosecutors claimed that Rossi, through Reditus, overcharged or mischaracterized tests such as PCR testing that could check for infectious diseases, including the COVID-19 virus, as a way to get more money from the government.
The tests were both paid with public and private health insurance programs, such as Medicare, Medicaid, Blue Cross Blue Shield of Illinois, Healthlink and the Health Resources & Services Administration’s Uninsured Program.
The contraband
Earlier this year, word leaked out that an inmate at the Peoria County Jail had a cannabis vape pen and a battery smuggled into the facility. That inmate was Rossi. He also had a sheet of k2 that was hidden in his bible, a prosecutor said in open court.
Rossi had been at the county jail since Aug. 23, 2023 while his fraud was working its way through the system. That time at the county jail should count towards his already imposed sentence.
The charges come less than a week after a former jailer at the Peoria County Jail was hit with state charges for allegedly providing an inmate with the exact same items. Watkins, however, has not publicly commented on whether the two cases were linked.
The Bloomington case
The earlier case involved his former employers, Central Illinois Orthopedic Surgery in Bloomington, where he was convicted of bilking them out of more than $1 million.
According to his plea, he admitted 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.”
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.
The civil suits
Several lawsuits have been filed in both federal and state court against Reditus, Rossi and others.
The status of those pending lawsuits was not immediately available.
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