Rossi investigations date back to 2018, new court filings claim

(WEEK) - Local and federal investigations into now-removed Reditus Labs CEO Aaron Rossi’s affairs started as early as 2018, new court filings claim.

The now removed Pekin CEO is facing ongoing civil lawsuits brought by ousted business partners Dr. Jim Davie and Dr. Malcolm Herzog, who accuse him of using company funds to fund a lavish lifestyle.

Aaron Rossi was indicted in March on federal tax fraud charges and was later removed from day-to-day operation of the company. But this court filing on behalf of Dr. Herzog says Rossi embezzled money from Central Illinois Orthopedic Surgery, to help fund his purchase of PAL Health Technologies.

In an April 2022 deposition of Dr. Lawrence Nord, Rossi’s former employer at CIOS., he alleges the FBI, IRS and Bloomington Police Department have investigated Rossi for about four years. Nord says that includes a Bloomington Police investigation about illegal prescription writing for controlled substances. He says IRS investigators became involved around the time Rossi was fired from CIOS in April 2018.

The Bloomington Police Department denied our previous Freedom of Information Act request on the police reports filed in 2018, saying it would interfere with ongoing legal matters. Our request for comment Tuesday was also denied for the same reason.

Nord also claimed under oath that Rossi was not a Doctor, and that state regulators asked him to stop using the title and referring to himself as a physician eight years ago.

“It’s startling,” Media Law Attorney Don Craven said of Nord’s claims. “I don’t know where the truth lies. But if I were Dr. Nord I would have been very concerned about some of the things Mr. Rossi was doing apparently.”

Reached for comment via email Tuesday, Rossi spokesperson Natalie Bauer Luce says, “This filing is nothing more than the inadmissible notes and unsupported claims from someone who threatened Aaron Rossi. It’s further evidence that there’s a coordinated effort underway to destroy Aaron’s reputation. Aaron is proud of his record of building a successful business and creating hundreds of jobs for the community, and he will continue to defend himself against these baseless claims.”

But this is also a departure from the public relations firm’s first statement on this matter. The Dr. reference was not placed in front of Rossi’s name. That’s in line with a Illinois Department of Financial and Professional Regulation complaint resting against Rossi. That complaint claims Rossi wrote more than 20 prescriptions for controlled substances on the CIOS electronic prescription pad without authorization, a medical license or the required federal certifications to do it. The current state of that investigation is unclear.

Some documents in the civil case remain under seal. Don Craven is working on behalf of Peoria and Bloomington-Normal news agencies to get that protective order lifted, arguing the case is in the public interest, since Reditus received more than $220 million in state COVID testing contracts.

“With this kind of stuff in the public record, what’s the purpose of a protective order?” Craven said. “All the parties will have all of these financial records. The question becomes when will the public be allowed access.”

Tazewell County Judge Chris Doscotch is expected to hear arguments on our request to unseal the case in a hearing May 2.

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