Former Reditus Labs CEO Aaron Rossi’s “fast-paced disruptor mentality” got the best of him when he defrauded the State of Illinois and public and private insurers out of hundreds of thousands of dollars at the height of the COVID pandemic.
That’s the phrase Rossi used to describe his actions during a sentencing hearing Tuesday in front of Chief Judge Sara Darrow in Peoria. Those actions resulted in a 37-month prison sentence handed down by Darrow. Rossi faced a maximum of 30 years.
The hearing marks the end of the second federal case accusing Rossi of fraud, specifically health care fraud and wire fraud. He pleaded guilty in April.
Rossi is currently serving a five-year sentence, two of which have already been spent in the Peoria County Jail, in a separate mail and tax fraud case.
Rossi’s former company Reditus made an estimated $300 million through lucrative contracts with the State of Illinois for COVID-19 testing. The company began to unravel as partners filed civil suits and accused Rossi of misusing funds to support a lavish lifestyle of private planes, cars and luxury RVs.
Assistant U.S. Attorney Douglas McMeyer recounted during Tuesday’s sentencing hearing how Rossi defrauded the state and private and public insurers, like Blue Cross/Blue Shield and Medicare.
He said the company, at Rossi’s explicit instruction, double-billed tests to both the state and insurers and used billing codes beyond the scope of Reditus services.
McMeyer said these practices continued, even after concerned employees brought them to Rossi’s attention.
“He lined his pocket during the height of the pandemic,” said McMeyer.
An auditing firm and government investigators’ best estimate of the total damage caused by the practices at Reditus Labs is $525,000.
Rossi’s attorney, Richard Blake, argued that while Rossi takes full responsibility for his actions, the COVID-19 pandemic was a chaotic time and he was practicing “really aggressive billing.” Blake described Rossi’s probable mindset as: “let me bill it, it will work itself out in the end,” saying his leadership style had to be similar to a “wartime general.”
Blake also pointed to dozens of letters supporting Rossi’s “life and character” submitted as part of a 137-page document shortly before the sentencing hearing.
“The community benefits from having Aaron Rossi outside,” he said. “That’s how Aaron Rossi’s genius is best served here.”
Blake also argued that, if there had not been a series of civil lawsuits followed by federal indictments, Rossi would have worked with auditors hired by his company to address the fraudulent practices and make the state whole.
When given an opportunity to speak before hearing his sentence, Rossi said he took full responsibility and apologized to his family. He made several mentions of the harm his absence has had on his wife and daughters.
Rossi also claimed the last two years in Peoria County Jail had been uncomfortable, as other prisoners harassed him for money and favors. Rossi said he led a daily Bible study, taught business classes to inmates, and felt an obligation to “maintain peace in the pod.”
“This will be the last time you see me in this capacity,” Rossi, clad in an orange county jumpsuit, told Darrow.
In handing down the consecutive sentence of three years and one month, Darrow said she felt it was important to consider the charges separate from the crimes Rossi already had been convicted of.
She said traumatic events outlined by Rossi’s attorneys in court filings, including a parents’ divorce at a young age, didn’t meet the bar of being considered mitigating factors.
The repeated fraudulent nature of Rossi’s offenses also were concerning to the judge.
“All I can chalk it up to is hubris and unlimited greed,” said Darrow.
Tuesday's hearing included sentencing for a separate charge — a contraband case charged when Rossi allegedly bribed a guard to sneak him in a synthetic marijuana vape pen. Darrow did not impose a sentence, ascribing the offense to time served.
Between both federal fraud cases, Rossi will serve a combined eight years in the Bureau of Prisons. With the conclusion of his federal cases, Blake requested placement for Rossi at minimum security camps in Terra Haute, Indiana, and Lowell, Florida.
Rossi also will forfeit a 2017 Liberty Coach Elegant Lady, a luxury RV valued at around $1 million, in lieu of paying a fine.
A federal civil case against Rossi, pending for years, reached a settlement in June, with a settlement signing deadline of July 25.
