Reditus receiver moves to sue Aaron Rossi, seeking payback for over $100 million
The court-appointed receiver hired to oversee Reditus Labs is asking for a judge’s permission to sue former CEO Aaron Rossi and other company insiders, hoping to claw back over $100 million in allegedly misappropriated funds.
Rossi was the face of Reditus as the Pekin-based company became a COVID testing giant during the pandemic, winning hundreds of millions of dollars in state contracts. Now, Rossi faces the prospect of being sued by his own company, the latest twist in the company’s unraveling.
Adam Silverman was appointed receiver at Reditus in April 2022, soon after Rossi was indicted on federal tax fraud charges. Silverman’s team “analyzed the company’s books and records, which revealed millions of dollars owed to the company by its affiliates, as well as transactions in which millions more of the company’s funds were used for purposes with no apparent benefit to the company,” according to a motion Silverman’s lawyers filed last week in Tazewell County court.
There is evidence of “serious wrongdoing” by Rossi and “several others who facilitated Rossi’s illicit conduct,” the receiver’s lawyers wrote. Reditus went out of business last fall.
“Rossi used Reditus Labs and his control over its business to enrich himself, his family, and his friends at the expense of Reditus Labs and its investors,” they wrote.
The receiver has asked a judge’s permission to proceed with a lawsuit on Reditus' behalf against Rossi, nine affiliated companies that he owns or partially owns, and two of his relatives. The proposed 26-count lawsuit would allege fraud, breach of contract, breach of fiduciary duty, and aiding and abetting.
The proposed lawsuit claims Rossi negotiated contracts with himself to manage Reditus that paid him at least $27.5 million. “Those amounts were excessive, unearned, commercially unreasonable and the product of an irreconcilable conflict of interest,” the receiver’s lawyers argue.
Beyond that alleged excessive compensation, Rossi is also accused of spending Reditus’ money on things unrelated to or not needed by the company, such as a $3.5 million, 750-acre estate along the Illinois River; a condo in Peoria; a fleet of aircraft and luxury vehicles; jewelry, watches, over $500,000 of custom-made clothing; Notre Dame football season tickets; and other items.
“To the extent the aircraft or automobiles were used for Reditus Labs-related travel, they were not a necessary expense as all travel could have been done for far lower cost using other more reasonable methods or vehicles at a reasonable cost,” the receiver’s lawyers wrote.
Rossi is also accused of allowing his “friends, family and certain Reditus Labs employees to use Reditus Labs credit cards for personal expenses.”
Rossi’s team has previously called many of those claims “baseless” and accused the former business partners of trying to “litigate via public opinion.”
The proposed lawsuit is part of ongoing civil litigation between Rossi and his former business partners in Tazewell County. The next hearing is set for 11 a.m. Friday.
Federal criminal charges against Rossi remain pending. He’s due back in court on those charges for a pretrial conference at 11:30 a.m. May 17. He’s pleaded not guilty.