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Aaron Rossi accused of defrauding state of Illinois, private insurers in new federal indictment

Aaron Rossi exits the federal courthouse in Peoria following a previous court appearance.
Hannah Alani
Aaron Rossi exits the federal courthouse in Peoria following a previous court appearance.

A federal grand jury is indicting former Reditus Labs CEO Aaron Rossi on new charges linked to hundreds of thousands of dollars worth of alleged COVID-19 testing fraud.

That includes six counts of healthcare fraud, one count of mail fraud, and four counts of wire fraud. Rossi defrauded the state and health insurers, and established policies to directly benefit himself financially, prosecutors said.

The indictment alleges the 40-year-old Morton man was double billing both private insurers and the state of Illinois for the same tests. The state paid out more than $150,000 for tests that were actually already paid for by private insurers.

The state paid a flat rate of $90 to $113 per test depending on the scope of services involved, but was only supposed to be invoiced for the difference that the patient's insurer didn't cover.

Reditus was ultimately paid more than $222 million by the state for COVID testing services during the pandemic. A former business partner alleged Rossi "pillaged" the company to bankroll his nouveau riche lifestyle, including the amassing of a fleet of luxury vehicles and multiple private planes.

The indictment also alleges Rossi defrauded healthcare providers including Medicare, Medicaid, Blue Cross Blue Shield of Illinois, and Healthlink. From October 2020 through November 2021, Rossi allegedly used improper medical codes to receive more than $150,000 worth of payments for services Reditus hadn't actually performed. These were reportedly submitted along with the proper COVID-19 test codes.

The court documents also suggest the foundations of Reditus were suspect from the start. Rossi wasn't legally able to employ pathologists or other physicians at Reditus because he wasn't eligible for a medical license in the state of Illinois, prosecutors said. He received a medical degree from a school in Barbados in 2012, but never completed a residency or fellowship.

The U.S. Attorney's Office says Rossi faces a maximum of up to 10 years imprisonment for each of the healthcare fraud charges, and up to 20 years imprisonment for each of the mail fraud and wire fraud charges. A combined $2.75 million in fines is also possible if convicted on all charges.

Rossi is currently awaiting a July 2 sentencing hearing in an unrelated tax fraud case. The former executive is currently being held in custody after the court found he repeatedly violated his bond conditions.

Rossi and Reditus Laboratories also face multiple federal civil suits.

The state severed its relationship with Rossi and Reditus soon after the first set of federal charges were lodged against him.

The Pekin-based company Reditus was a powerhouse in COVID-19 test processing during the peak of the pandemic, but has since lapsed into insolvency. Testing services ended in November 2022, and the former headquarters on Enterprise Drive is currently listed for lease.

Reditus was operating a state-contracted COVID testing site in Bloomington in 2022 at the time Rossi was indicted on the unrelated tax fraud case. The state kept the site open for a few more weeks before closing it when its contract with Reditus expired.

Gov. JB Pritzker's office has not responded to a request for comment.

Tim is the News Director at WCBU Peoria Public Radio.