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Aaron Rossi handed 5-year prison sentence in federal fraud cases

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.

Former Reditus Laboratories CEO Aaron Rossi will spend five years in federal prison on his guilty pleas to felony charges of mail and tax fraud.

Rossi, 40, will also be required to pay a $1 million fine and more than $2.1 million in total restitution, with $1.9 million going to Central Illinois Orthopedic Surgery (CIOS), the Bloomington practice that employed him at the time of the crimes.

The Morton resident has been in custody at the Peoria County Jail since September for violating his bond conditions. In a request for leniency during his allocution, he apologized to the court, CIOS partners Dr. Larry Nord and Dr. Brett Keller, and “family, colleagues and friends.”

“The last 10 months have been the most difficult, gut-wrenching time in my life,” added Rossi, saying he makes no excuses for his actions and that he let pride get in the way.

In February, Rossi pleaded guilty to one count of mail fraud for using company funds for personal expenses while he was employed by CIOS, and one count of tax fraud for withholding income on his tax return. Six other charges were dropped as part of a plea agreement.

U.S. District Judge Sara Darrow imposed the penalties during a two-hour sentencing hearing Tuesday at the federal courthouse in downtown Peoria. She called Rossi’s conduct “shameful,” driven by greed and hubris.

“It was, simply put, taking things that didn’t belong to you,” Darrow said. “It was to keep your lifestyle going, and I don’t know when it was ever going to stop.”

Darrow said she was encouraged by Rossi’s apparent personal reflection and growth while in jail, but she said his contributions to charity didn’t mitigate his crimes.

“You can’t have one finger taking money from the till, and then have your other hand out giving to the community,” she said.

The sentence came one day after Rossi pleaded not guilty to charges of health care fraud, mail fraud and wire fraud in a separate case.

Although the court room was full, no witnesses spoke during the hearing. Instead, Assistant U.S. Attorney Douglas McMeyer and defense attorney Richard Blake chose to rely on the victim impact statements and character reference letters included in the pre-sentencing report.

Rossi could have been sentenced to up to 20 years in prison and three years of supervised release for the mail fraud count, along with up to three years imprisonment and one year of supervision for the false tax return count.

“One consistent element to everything is the defendant has proven a propensity to lie and mislead others when it benefits himself,” said McMeyer, claiming Rossi took money he didn’t deserve to fund extravagant tastes.

McMeyer said Rossi presented himself as a doctor while he worked at CIOS, even though he is only trained as a surgical assistant. The prosecution also claimed Rossi was originally hired as an office assistant, was promoted to office manager after forcing out his direct supervisor, and then told people he was the CEO of the business.

Blake said the attempts to paint Rossi as a villain are “overblown,” and that his client is “better suited as a member of the community” than as an inmate.

“He is a different man now,” Blake said. “There may be statements that were untrue, but we can’t get into a man’s mind to know what was ‘a lie.’”

Following his incarceration, Rossi will serve two years of supervised release. Blake requested Rossi be allowed to serve his sentence at the federal prison in downstate Marion.

Rossi also has been named in several civil cases connected to Reditus, the Pekin-based firm that landed a lucrative contract with the State of Illinois for COVID-19 PCR testing. Reditus folded in 2022 amid Rossi’s legal troubles.

Darrow rescheduled Rossi’s next court appearance in the latest criminal case to Sept. 17.

Contact Joe at jdeacon@ilstu.edu.