PEORIA, Ill. (WMBD) — In an unscheduled hearing, former Reditus front man Aaron Rossi pleaded guilty to fraud and contraband charges, resolving the last of the criminal issues the former biotech wunderkind faced.

Rossi pleaded guilty in U.S. District Court in Peoria 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.

What that means is that the once high-flying and fancy-car riding Rossi is now facing up to 30 more years in prison. He’s already serving a five-year term for an earlier fraud case resolved last year.

He remains in custody of the U.S. marshals pending July 15 hearing before Chief U.S. District Judge Sara Darrow.

During the brief court hearing, attorneys mentioned that while Rossi might face up to 30 years, it’s likely that his sentencing guideline range for the fraud counts would be around three to four years.

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.

Several other charges related to the fraud allegations were dropped but he still faces decades behind bars in addition to the five years he’s already serving for defrauding his former employers, Central Illinois Orthopedic Surgery in Bloomington, out of more than $1 million.

The hearing came about three weeks before Rossi, 41, was to stand trial on the fraud charges. That trial is now, off and he will next appear in court in a few months to find out what his new sentence will be.

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

Last month, 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 comment on whether two cases were linked.

The Bloomington case

Regarding the case he was sentenced to prison on, those charges alleged 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.”  

The fraud involved having items such as a 49-inch high-definition TV shipped to his house on the company’s dime as well as hiding his trips to upscale men’s clothing stores as “uniform purchases.”

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.

Two federal lawsuits, unsealed last year, allege massive fraud and grift committed by Rossi and his company, Reditus Laboratories, which resulted in taxpayers being bilked out of hundreds of millions of dollars.

The status of those pending lawsuits was not immediately available.